Bengaluru: China’s Alibaba Group Holding Co., Ltd. said on Friday that it had agreed to pay $433.5 million to settle a US class-action lawsuit filed by investors alleging monopolistic practices by the e-commerce giant. Alibaba has denied any wrongdoing, saying it entered the settlement to avoid the cost and hold up of further litigation. The proposed settlement has been filed in federal court in Manhattan and requires approval by U.S. District Judge George Daniels.
The lawsuit, filed in 2020, claimed that Alibaba claimed it did not violate antitrust or unfair competition laws, despite requiring merchants to choose only one distribution platform.
The settlement covers investors in Alibaba’s American Depositary Shares from November 13, 2019, to December 23, 2020, and resolves claims that they suffered losses when the market recognized Alibaba’s misleading statements and the stock price fell. Lawyers for the plaintiffs in court papers called the proposed deal an “extraordinary outcome,” saying it far exceeded the average recovery in securities class actions where investor losses exceeded $10 billion.
The maximum damages that Alibaba investors could have sought had they continued with the litigation was $11.63 billion, the lawyers wrote. This case is brought in In re Alibaba Group Securities Holdings Limited, U.S. District Court, Southern District of New York, No. 20-09568.