Alibaba to pay $600m to settle illegal drug sales allegations in US probe
E-commerce giant admitted it failed to prevent about 80,000 illegal drug product sales, according to US Justice Department. Chinese technology and e-commerce giant Alibaba and
E-commerce giant admitted it failed to prevent about 80,000 illegal drug product sales, according to US Justice Department. Chinese technology and e-commerce giant Alibaba and its United States-based payment processor will pay $600m to resolve allegations that they failed to prevent illegal drug sales, according to the US Justice Department. The Justice Department said on Wednesday that Alibaba and AUS Merchant Services agreed as part of the deal to accept responsibility for the acts of their officers and employees, and enhance their compliance programmes. The companies entered into non-prosecution agreements to resolve allegations that they violated the US Federal Food, Drug, and Cosmetic Act by failing to prevent merchants from selling and importing illegal drugs, chemicals and pill presses into the US through Alibaba’s e-commerce platforms.
“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,” Alibaba said in a statement. According to the Justice Department, Alibaba, as part of the deal, admitted that it failed from 2016 to 2024 to prevent about 80,000 product sales of chemicals, drugs and pharmaceutical counterfeiting equipment that were imported from overseas. Those transactions had a combined merchandise value of more than $200m, according to the Justice Department. Law enforcement during the probe conducted more than 40 undercover purchases of illegal pharmaceuticals and counterfeiting equipment, it said.
At times, Alibaba employees raised concerns about whether illegal products were being sold and whether the company’s compliance measures were inadequate and could prevent such sales from occurring, the department said. Law enforcement officers from multiple US government agencies conducted more than 40 undercover purchases of pharmaceuticals and equipment that were illegal to import into the US, according to a news release on the settlement resolution. The US government said the US-based payment processor’s anti-money laundering compliance programme failed to prevent some merchants from using its services to facilitate the sale and importation of banned products.
“Today’s resolution reflects the Department of Justice’s commitment to ensuring that companies operating e-commerce and digital payment platforms keep illegal, unapproved, misbranded, and dangerous foreign pharmaceuticals off their marketplaces,” Assistant US Attorney General Brett Shumate said in a statement. Alibaba operates some of the world’s largest e-commerce platforms, including Alibaba.com and AliExpress.com.
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