Alibaba's platform sold illegal drugs; settles with U.S. Justice Department for $600 million

Alibaba Group and a subsidiary of its affiliate Ant Group have reached a settlement with the U.S. Justice Department, agreeing to pay $600 million to resolve an investigation into their failure to prevent the sale of illegal drugs through their e-commerce platforms. The settlement avoids further prosecution of the companies by the U.S. government.

The investigation, which spanned several years, focused on Alibaba's role in facilitating the import and sale of illicit chemical substances, pharmaceuticals, and counterfeit drug manufacturing equipment into the United States. According to the Justice Department, Alibaba's platforms hosted approximately 80,000 listings for illegal goods, with a total transaction value exceeding $200 million between January 2016 and December 2024.

Ant Group's subsidiary, Aus Merchant Services, was also implicated for providing payment processing services for these illicit transactions between January 2020 and December 2023. The U.S. government stated that the companies have implemented compliance measures and corrective actions, which contributed to the decision to settle.

Under the terms of the agreement, Alibaba will forfeit $200 million, and Aus Merchant Services will forfeit $190 million. Additionally, Alibaba will pay a $125 million fine, and Aus will pay an $85 million fine. The Justice Department indicated that this settlement is part of a broader effort to combat the illicit drug trade.