Alibaba Settles Lawsuit for $433.5 Million

(Reuters) – China's Alibaba (NYSE:BABA) announced on Friday that it had 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 the settlement to avoid the cost and disruption of further litigation.

The proposed settlement was filed in federal court in Manhattan and requires approval from U.S. District Judge George Daniels. The lawsuit, initiated in 2020, claimed that Alibaba asserted compliance with anti-monopoly and unfair competition laws, despite allegedly requiring merchants to choose only one distribution platform.

The settlement pertains to investors in Alibaba's American depositary shares from Nov. 13, 2019, to Dec. 23, 2020. It resolves claims that these investors suffered losses when the market recognized Alibaba's misleading statements, resulting in a decline in the stock price. The plaintiffs' lawyers characterized the proposed deal as "an exceptional result," noting that it significantly exceeded the median recovery in securities class actions where investor losses surpassed $10 billion.

The maximum damages that Alibaba investors could have pursued had they continued the litigation was $11.63 billion, according to the lawyers. The case is titled in re Alibaba Group Holding Ltd Securities Litigation, U.S. District Court, Southern District of New York, No. 20-09568.