Alibaba Group Holding and AUS Merchant Services, a subsidiary of Ant Group, have agreed to pay a combined $600 million to settle allegations from the U.S. Justice Department regarding illegal sales facilitated on Alibaba’s platforms. The settlement stems from claims that Alibaba.com and AliExpress allowed merchants to sell and import prohibited pharmaceuticals, controlled substances, restricted chemicals, and pill presses into the United States.
The Justice Department's investigation found that between 2016 and 2024, Alibaba maintained policies intended to block prohibited products but failed to stop approximately 80,000 transactions involving these goods. These transactions had a combined gross merchandise value exceeding $200 million. During a nearly four-year period ending in December 2023, AUS Merchant Services acknowledged shortcomings in its transaction monitoring, particularly involving payments from high-risk jurisdictions and complex invoicing scenarios, which contributed to the illicit activity on the platform.
As part of a non-prosecution agreement, Alibaba will pay a criminal penalty of $125 million and forfeit $200 million, while AUS will pay an $85 million penalty and forfeit $190 million. Both companies committed to enhancing their compliance programs and to ongoing cooperation with the Justice Department’s efforts to curb illegal trade on their platforms.
An AUS Merchant Services spokesperson stated that they have strengthened their compliance measures and will continue refining them to meet regulatory expectations. Alibaba highlighted that the settlement would enforce stricter controls over third-party sales in the U.S. market.
The U.S. Department of Justice emphasized the responsibility of online marketplaces to implement robust safeguards against the exploitation of their platforms by malicious actors. The department’s statement underlined that failure to do so will result in legal accountability.