Alibaba to pay $600M US settlement over illegal drug sales
Alibaba $BABA will pay the US $600M to settle DOJ allegations it let merchants ship illegal drugs, controlled substances and pill-making equipment into the country. It acknowledged failing to stop roughly 80,000 unlawful import sales from 2016 to 2024 across Alibaba.com and AliEx
Alibaba $BABA has agreed to pay the US government $600 million to resolve allegations that it allowed illegal products to flow into the country through its platforms. In an agreement with the Justice Department, the Hangzhou-based company acknowledged that between January 2016 and December 2024 it failed to stop roughly 80,000 product sales involving unlawful imports, including pharmaceuticals, controlled substances, regulated chemicals and pill-making equipment. The government's case centered on Alibaba's US-based payment processor, AUS Merchant Services, which it said failed to prevent merchants from selling and importing illegal goods through Alibaba.com and AliExpress.com in violation of the Federal Food, Drug, and Cosmetic Act and other federal laws. As part of the settlement, Alibaba and the payment unit agreed to accept responsibility for the conduct of their officers and employees and to strengthen their compliance programs. The case is a reminder that operators of large marketplaces carry legal exposure for what third-party sellers move through their systems, particularly when a US payment entity sits in the transaction chain. For a company already navigating a tense US-China commercial relationship, resolving a federal probe removes one source of legal uncertainty even as the compliance obligations continue.