Founder and Executive Chairman of Alibaba Group Jack Ma attends the Ant Financial event in Hong Kong, China.
Credit: Reuters Photo
China's Alibaba said on Friday it had agreed to pay $433.5 million to settle a US class-action lawsuit filed by investors alleging monopolistic practices by the e-commerce giant.
Alibaba denied wrongdoing, saying 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 the approval of US District Judge George Daniels.
The lawsuit, filed in 2020, alleged that Alibaba claimed it did not violate anti-monopoly or unfair competition laws, despite requiring merchants to choose only one distribution platform.
The settlement covers investors in Alibaba's American depositary shares from Nov. 13, 2019, to Dec. 23, 2020, and resolves claims they suffered losses when the market recognized Alibaba's misleading statements and the stock price fell.
Lawyers for the plaintiffs in court papers called the proposed deal "an exceptional result," saying it vastly exceeded the median recovery in securities class actions where the investor losses exceeded $10 billion.
The maximum damages award the Alibaba investors could have potentially sought had they continued litigating was $11.63 billion, the lawyers wrote.
The case is in re Alibaba Group Holding Ltd Securities Litigation, US District Court, Southern District of New York, No. 20-09568.