Alibaba and Ant Reach $600 Million Settlement with U.S. Department of Justice

▲ Alibaba Group

The U.S. Department of Justice announced on July 1 (local time) that China's Alibaba Group and the U.S.-based payment processor AUS Merchant Services have reached a settlement of $600 million to resolve investigations into allegations that they failed to prevent the sale of illegal drugs and other prohibited items in the United States.

AUS Merchant Services is a subsidiary of China's Ant Group, which operates Alipay.

The Department of Justice had been investigating allegations that Alibaba Group violated the Federal Food, Drug, and Cosmetic Act (FDCA) by failing to prevent sellers from using its B2B platform, Alibaba.com, and its B2C platform, AliExpress, to sell illegal products imported into the U.S., including illegal drugs, controlled substances, listed chemicals, and counterfeit pharmaceutical equipment.

The Department of Justice explained that there were approximately 80,000 instances of illegal products sold between 2016 and 2024, with a transaction volume exceeding $200 million.

While Alibaba had policies in place to restrict the sale of prohibited products, the Department of Justice stated that employees had raised concerns that the company's compliance controls were insufficient and failed to prevent the sale and import of illegal goods.

The Department of Justice added that Alibaba also provided private messaging services within its platforms to sellers and buyers, which some sellers used to facilitate illegal transactions, and that Alibaba profited to some extent from these illegal activities by the sellers.

Acting Assistant Attorney General Brian Boynton said, "Today's resolution demonstrates the U.S. government's commitment to ensuring that companies operating e-commerce and digital payment platforms do not allow illegal and dangerous foreign drugs to be distributed in the U.S. market."

In a statement, Alibaba said, "This agreement represents our commitment to the highest standards of controls, policies, and measures to address the sale of non-compliant products, with the full cooperation of the company."

(Photo: AP, Yonhap News)

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