Alibaba to Pay $600M to Settle Allegations It Allowed Illegal Drug and Equipment Sales
The settlement includes a non-prosecution agreement after Alibaba acknowledged about 80,000 unlawful product sales from 2016 to 2024.
- On Wednesday, Alibaba and AUS Merchant Services agreed to pay $600 million to the Department of Justice to resolve allegations they facilitated illegal imports of pharmaceuticals and pill-making equipment into the United States.
- Between January 2016 and December 2024, Alibaba acknowledged failing to stop roughly 80,000 illegal product sales violating the Federal Food, Drug, and Cosmetic Act; merchants used messaging services to circumvent compliance controls.
- Federal agencies including the FDA and IRS-CI conducted more than 40 undercover purchases investigating the platform's gaps, while AUS Merchant Services admitted its anti-money laundering program failed to prevent merchants from using payment services for prohibited imports.
- Both companies committed to implementing stricter compliance programs and cooperating with regulators under non-prosecution agreements; IRS Criminal Investigations Chief Jarod Koopman said the resolution "underscores IRS Criminal Investigation's commitment to following the money."
- The penalty represents one of the largest DOJ settlements against a Chinese technology company for compliance failures, adding to separate regulatory pressure from Anthropic regarding its Claude AI model and legal disputes with the Pentagon.
44 Articles
44 Articles
Alibaba, Payment Processor to Pay $600 Million Over Illegal Sales on Its Platforms
Alibaba Group Holding Ltd. and its U.S.-based payment processor agreed to pay a combined $600 million to resolve Department of Justice (DOJ) allegations that merchants used Alibaba’s online platforms to sell and import illegal pharmaceuticals, controlled substances, listed chemicals, and pill-press equipment into the United States over nearly a decade. The DOJ announced the resolution on July 1 under separate nonprosecution agreements with Aliba…
Alibaba Agrees To $600 Million DOJ Settlement
Alibaba and its payment affiliate, AUS Merchant Services, have agreed to pay $600 million to resolve a U.S. Department of Justice investigation into allegations that their platforms facilitated the illegal import of pharmaceuticals and pill-making equipment into the United States. The settlement covers alleged compliance failures spanning from January 2016 through December 2024.💡According to the Justice Department, Alibaba failed to prevent the…
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