Alibaba Group Holding Ltd., China’s largest e-commerce company, has agreed to pay $433.5 million to settle a class-action lawsuit brought by U.S. investors who alleged monopolistic practices.
The lawsuit, filed in 2020, also accused Alibaba of misleading statements that artificially inflated its stock value and of engaging in anti-competitive practices.
Despite agreeing to the settlement, Alibaba denied any wrongdoing, stating it chose to settle to avoid the expense and disruption of prolonged litigation.
In a statement, Alibaba said, “We believe this settlement allows us to move forward without the continued cost and distraction of litigation.”
The proposed settlement, filed in a Manhattan federal court, now awaits approval from US District Judge George Daniels.
If approved, it will provide compensation to investors who held Alibaba’s American depositary shares between November 13, 2019, and December 23, 2020.
The plaintiffs allege they incurred significant financial losses when Alibaba’s stock price dropped after the market reacted to news of the company’s alleged monopolistic conduct.
The lawsuit’s claims focused on Alibaba’s practice of requiring merchants to choose a single distribution platform, allegedly violating anti-monopoly and unfair competition laws.
Although Alibaba has consistently maintained that it did not breach any regulations, the settlement aims to put the allegations to rest.
Plaintiffs’ attorneys called the settlement “an exceptional result,” noting that it far exceeds the median recovery for similar securities class actions where investor losses have topped $10 billion.
They emphasised that the maximum potential damages investors might have pursued could have reached as high as $11.63 billion.
Boluwatife Enome
Follow us on:
