Alibaba announced that it had agreed to pay $433.5 million to settle a US class-action lawsuit against the e-commerce giant for monopolistic practices. While Alibaba denied any wrongdoing, it said it reached the settlement to avoid the expense and disruption of further litigation.
The proposed settlement, which US District Judge George Daniels must approve, was filed in federal court in Manhattan.
The lawsuit, filed in 2020, alleged that Alibaba did not violate antitrust or unfair competition laws by requiring merchants to choose only one distribution platform.
The settlement covers investors in Alibaba’s American depositary shares from Nov. 13, 2019, through Dec. 23, 2020, and resolves claims that they suffered losses when the market recognized Alibaba’s misleading statements, causing the stock price to fall.
In court papers, lawyers for the plaintiffs called the proposed deal an “extraordinary result,” saying it far exceeds the median recovery in securities class actions, where investor losses have topped $10 billion.
The lawyers wrote that the maximum damages the Alibaba investors could have potentially sought, had they continued litigation, were $11.63 billion.
The case is In re Alibaba Group Holding Ltd. Securities Litigation, U.S. District Court, Southern District of New York, No. 20-09568.
