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(Reuters) – China’s Alibaba said on Friday it had agreed to pay $433.5 million to settle a U.S. class action lawsuit brought by investors over the e-commerce giant’s alleged monopolistic practices. Alibaba denied wrongdoing and said it had entered into a settlement to avoid the costs and disruption of further litigation. The proposed settlement was filed in federal court in Manhattan and requires the approval of U.S. District Judge George Daniels. The lawsuit, filed in 2020, alleged that Alibaba claimed it had not violated anti-monopoly or unfair competition laws, despite requiring merchants to choose only one distribution platform.
The settlement covers investors in Alibaba’s U.S. depository shares from November 13, 2019 to December 23, 2020, and resolves claims they suffered losses when the market recognized Alibaba’s misleading statements and its stock price fell. Lawyers for the plaintiffs in lawsuits called the proposed deal “an exceptional result” and said it far exceeded the average recovery in securities class actions, with losses to investors exceeding $10 billion. The maximum damages that the Alibaba investors could have potentially sought if they had continued to litigate was $11.63 billion, the lawyers wrote. The case concerns Alibaba Group Holding Ltd Securities Litigation, US District Court, Southern District of New York, No. 20-09568.
(Reporting by Surbhi Misra in Bengaluru and Nate Raymond in Boston; Editing by William Mallard)