China’s e-commerce giant Alibaba has agreed to pay out $433.5 million in settlement of a class action filed by investors in the United States, according to Reuters. Filed in 2020, the lawsuit accuses Alibaba of monopolistic practices-the company imposed restrictive policies on merchants, forcing them to sell only on its platform. These restrictions, it claims, are violations of anti-monopoly and unfair competition laws.
Set in Manhattan federal court and under the scrutiny of US District Judge George Daniels, the settlement prevents the cost and hassle of costly long litigation. The agreed-upon deal includes Alibaba shareholders who had American depositary shares from November 13th, 2019 to 23rd December 2020.
The plaintiffs and the investors also argue that the alleged monopolistic practices of the company affected the value of its stocks. Misleading statements and practices brought a downward slide in the stock price of Alibaba once the market caught wind of its company tactics.
According to court papers, the plaintiffs’ attorneys called the proposed settlement an “outstanding outcome.” This sum was characterized as far greater than what is typically recovered in class actions based on securities cases in which investor losses exceed $10 billion. Litigation counsel has indicated that without this settlement, investors could have been awarded as much as $11.63 billion had the action continued.
It comes as In re Alibaba Group Holding Ltd Securities Litigation. Case number 20-09568 was presented before the U.S. District Court for the Southern District of New York. It admitted no wrongdoing but opted for a settlement to deal with the claim expeditiously and avoid any form of further business disruptions. The settlement is subject to court approval and, when confirmed, will offer partial compensation to aggrieved investors while representing another milestone in Alibaba’s US lawsuits.
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