Alibaba settles U.S. probe for $600 million

• Alibaba Group and AUS Merchant Services agreed to pay $600 million to resolve U.S. Justice Department allegations.
• The case involved claims of illegal pharmaceutical sales and controlled substances moving through Alibaba.com and AliExpress.com.
• Authorities said the settlement covers roughly 80,000 prohibited transactions worth over $200 million in gross merchandise value.

Alibaba Group (NYSE:BABA) agreed with the U.S. Department of Justice to pay $600 million to settle allegations tied to illegal pharmaceutical and controlled substance sales on its e-commerce platforms.

The settlement also includes AUS Merchant Services, a U.S.-based payments processor linked to Ant Group, over compliance and transaction monitoring failures.

The case centers on allegations that prohibited goods, including controlled substances and regulated chemicals, were sold and shipped through Alibaba.com and AliExpress.com.

U.S. authorities said the matter involves around 80,000 prohibited transactions spanning from 2016 to 2024, with more than $200 million in total gross merchandise value.

Authorities said undercover operations were used to test marketplace safeguards, resulting in multiple illegal purchases of restricted pharmaceutical and related products.

Under the agreement, Alibaba will pay $125 million in criminal fines and $200 million in forfeiture, while AUS Merchant Services will contribute $85 million in fines and $190 million in forfeited funds.

The Justice Department said both companies must strengthen compliance systems and improve transaction monitoring controls going forward.