TL;DRAlibaba and its US payment arm will pay 600 million dollars to resolve a DOJ probe into illegal pharmaceutical sales on its e-commerce platform.
Alibaba and its US digital payment processor have agreed to pay 600 million dollars to resolve a federal investigation into whether they failed to prevent the sale and importation of illegal pharmaceuticals and controlled substances, the Justice Department said on Wednesday. Alibaba entered into a non-prosecution agreement to end a probe of alleged violations of the Federal Food, Drug, and Cosmetic Act between 2016 and 2024. The investigation was led by the DOJ and the US Attorney’s Office in Rhode Island.
Alibaba admitted that overseas customers used its platforms to make roughly 80,000 purchases of products that lacked approvals under US drug, device, or importation laws, with a combined value of more than 200 million dollars. The agreement did not specify the products by name, but the DOJ said they involved pharmaceuticals, regulated chemicals, and drug counterfeiting equipment. US agents conducted more than 40 undercover purchases of drugs and equipment that were illegal for import.
The company acknowledged that it “failed to prevent some third-party sellers from circumventing controls and measures” on its platform and using it to sell and import goods into the US in violation of federal law. Alibaba employees had raised concerns internally about compliance measures and filtering systems that were not catching the illegal sales, the company admitted.
