Alibaba will pay $433.5 million to settle the case

BENGALURU, INDIA:

China’s Alibaba Group Holding Limited said Friday it has agreed to pay $433.5 million to settle a class-action lawsuit filed in the United States by investors who alleged monopolistic practices of the e-commerce giant.

Alibaba has denied wrongdoing, saying it reached the settlement to avoid the cost and disruption of further litigation. The proposed settlement has been filed in federal court in Manhattan and requires approval from U.S. District Judge George Daniels.

The lawsuit, filed in 2020, alleged that Alibaba claimed it did not violate anti-monopoly or unfair competition laws despite only requiring merchants to choose a distribution platform.

The settlement covers investors in Alibaba’s American depositary shares from November 13, 2019, through December 23, 2020, and resolves allegations that they suffered losses when the market discovered Alibaba’s misleading statements and stock prices collapsed. In court documents, plaintiffs’ attorneys called the proposed settlement an “exceptional outcome” and said it greatly exceeded the average recovery in securities class action lawsuits, where investor losses have exceeded $10 billion.

The maximum compensation Alibaba investors could potentially seek if they proceed with the case is $11.63 billion, the lawyers wrote. The case is Alibaba Group Holding Limited Securities Litigation, U.S. District Court, Southern District of New York, No. 20-09568.