Alibaba (HKG:9988) and AUS Merchant Services, a U.S. subsidiary of Ant Group, agreed to pay $600 million to resolve allegations that they failed to prevent the sale of illegal pharmaceuticals, controlled substances and related equipment through Alibaba's e-commerce platforms, the U.S. Department of Justice said Wednesday.
The tech giant acknowledged that it failed to stop merchants on Alibaba.com and AliExpress from selling prohibited products into the United States between 2016 and 2024.
In a statement issued to, Alibaba described the settlement as a "mutually satisfactory resolution with U.S. regulators."
"This settlement reflects a thorough regulatory process with Alibaba's full cooperation and our commitment to best-in-class standards of control, policies, and measures against non-compliant product sales."
The violations involved about 80,000 transactions with a combined gross merchandise value exceeding $200 million.
The department also alleged that AUS, formerly known as Alipay US, failed to maintain adequate anti-money-laundering controls, thereby allowing some merchants to use its payment services to facilitate illegal sales.
Alibaba will pay a $125 million criminal penalty and forfeit $200 million, while AUS will pay an $85 million penalty and forfeit $190 million.
The companies also agreed to strengthen their compliance programs and continue cooperating with U.S. authorities.