Alibaba will pay $433.5 million to settle lawsuit over monopoly claims

Alibaba will pay $433.5 million to settle a US class action lawsuit alleging monopolistic practices. The lawsuit, filed in 2020, alleges that Alibaba limited merchants to a single platform, violating competition laws.

The Chinese e-commerce giant Alibaba.com has agreed to pay $433.5 million to settle a US class action lawsuit, Reuters reports. The lawsuit, filed by investors in 2020, alleges that the company engaged in monopolistic practices. It alleges that Alibaba had limited merchants to a single distribution platform, a practice it claimed violated anti-monopoly and unfair competition laws.
The company said it has reached a settlement to avoid the costs and disruption of lengthy litigation. The settlement proposal, the e-commerce giant said, has been filed in Manhattan federal court. It is pending approval by U.S. District Judge George Daniels.
According to the report, the settlement concerns investors in Alibaba American depositary receipts for shares from November 13, 2019 to December 23, 2020. The settlement concerns claims that investors suffered losses when the market recognized Alibaba’s allegedly misleading statements, leading to a decline in its stock price.
In court filings, plaintiffs’ attorneys described the proposed settlement as “an exceptional result,” noting that it significantly exceeds the average recovery in securities class actions where investor losses exceeded $10 billion. If the investors had pursued the case, Alibaba investors could have potentially sought up to $11.63 billion in damages, according to the lawyers. The case has the title In connection with Alibaba Group Holding Ltd Securities LitigationUS District Court, Southern District of New York, No. 20-09568.