Alibaba Settles U.S. Class-Action Lawsuit

(Reuters) – China's Alibaba (NYSE:BABA) announced on Friday that it has agreed to pay $433.5 million to settle a U.S. class-action lawsuit filed by investors alleging monopolistic practices by the e-commerce giant. Alibaba denied any wrongdoing, stating that it entered into the settlement to avoid the costs and disruptions that would arise from continued litigation.

The proposed settlement was submitted in federal court in Manhattan and requires the approval of U.S. District Judge George Daniels. The lawsuit, filed in 2020, accused Alibaba of violating anti-monopoly and unfair competition laws, claiming it forced merchants to select only one distribution platform.

The settlement specifically addresses investors in Alibaba's American depositary shares from November 13, 2019, to December 23, 2020, and resolves claims that they endured losses when the market recognized Alibaba's misleading statements, leading to a drop in stock price. Lawyers representing the plaintiffs described the proposed agreement as "an exceptional result," highlighting that it far exceeded the median recovery in securities class actions involving investor losses that surpassed $10 billion. They noted that the maximum damages the Alibaba investors could have sought had they continued litigation was $11.63 billion.

The case is titled in re Alibaba Group Holding Ltd Securities Litigation, U.S. District Court, Southern District of New York, No. 20-09568.