Alibaba Group Holding Ltd., China’s leading e-commerce company, has agreed to a $433.5 million settlement in a class-action lawsuit filed by U.S. investors alleging monopolistic practices and misleading statements that inflated its stock value.
The lawsuit, initiated in 2020, accused Alibaba of anti-competitive behavior and making false statements, which the plaintiffs claim led to financial losses when the company’s stock price fell following revelations about its practices. Despite agreeing to the settlement, Alibaba denied any wrongdoing, explaining that it chose to settle to avoid the cost and disruption of ongoing litigation.
“We believe this settlement allows us to move forward without the continued cost and distraction of litigation,” Alibaba stated.
The settlement, which was filed in a Manhattan federal court, now awaits the approval of U.S. District Judge George Daniels. If approved, the agreement will compensate investors who held Alibaba’s American depositary shares between November 13, 2019, and December 23, 2020.
The lawsuit primarily focused on Alibaba’s alleged practice of requiring merchants to choose a single distribution platform, which the plaintiffs argued violated anti-monopoly and unfair competition laws.
Attorneys for the plaintiffs hailed the settlement as “an exceptional result,” noting that it significantly exceeds the median recovery for similar securities class-action cases involving investor losses of over $10 billion. They highlighted that the maximum potential damages investors could have pursued might have reached $11.63 billion.
