Alibaba to Pay $600 Million to Settle DOJ Probe Into Illegal Pharmaceutical Sales on Its Platforms
核心洞察
Alibaba and its U.S. payment processor AUS Merchant Services (搜索) agreed to pay $600 million to resolve a federal investigation into illegal pharmaceutical sales spanning 2016 to 2024.
The company acknowledged roughly 80,000 prohibited transactions involving unapproved drugs, controlled substances, and pill-counterfeiting equipment with a combined value exceeding $200 million.
Undercover federal agents conducted more than 40 purchases of illegal pharmaceuticals and equipment, while internal Alibaba employees had raised concerns about inadequate compliance safeguards.
Alibaba Group (搜索) and its U.S.-based payment processor, AUS Merchant Services (搜索), have agreed to pay $600 million to resolve a Department of Justice investigation into whether the companies failed to prevent the sale and importation of illegal pharmaceuticals and controlled substances through their e-commerce platforms, the Justice Department announced Wednesday.
The non-prosecution agreements cover alleged violations of the Federal Food, Drug, and Cosmetic Act between January 2016 and December 2024. The investigation was led by the DOJ and the U.S. Attorney's Office in Rhode Island.
Alibaba admitted that overseas customers used its platforms — Alibaba.com and AliExpress.com — to make approximately 80,000 purchases of products that lacked approvals under U.S. drug, device, or importation laws, with a combined gross merchandise value exceeding $200 million. The DOJ stated the products involved pharmaceuticals, regulated chemicals, controlled substances, and drug-counterfeiting equipment, including pill presses.
Undercover Operations and Internal Warnings
To build its case, the government deployed undercover agents who conducted more than 40 separate purchases of drugs and equipment that were illegal for import into the United States. 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 in violation of federal law.
Internal warnings had surfaced within Alibaba from employees who questioned whether the platform's safeguards were adequate, even as formal rules against selling restricted goods remained on the books. Alibaba also provided a private in-platform messaging service that some merchants used to arrange illegal transactions — and in some instances, to direct buyers to third-party encrypted messaging apps to complete those deals, according to the Justice Department.
Payment Processing Failures
AUS Merchant Services (搜索), a subsidiary of Ant Group (搜索) that previously operated as Alipay U.S., admitted that gaps in its anti-money-laundering program allowed certain merchants to run prohibited transactions through its network. Wire-transfer records were not consistently fed into the company's transaction-monitoring tools, leaving suspicious activity from high-risk jurisdictions undetected. Court records show that at least one seller kept moving banned goods to U.S. customers even after AUS had flagged and reported the account.
Financial Penalties and Compliance Requirements
Alibaba's share of the penalty includes $125 million in criminal fines and a $200 million forfeiture. AUS Merchant Services (搜索) will contribute $85 million in criminal fines and $190 million in forfeited funds. As a condition of the deal, both firms committed to overhauling their compliance operations and maintaining an ongoing cooperative relationship with prosecutors.
"Companies operating online marketplaces — whether based in the United States or abroad — must implement appropriate safeguards to prevent bad actors from exploiting their platforms," said Assistant Attorney General Brett A. Shumate. "If they fail to do so, the Department will hold them accountable."
First Assistant U.S. Attorney Charles C. Calenda for the District of Rhode Island described the $600 million resolution as the largest monetary settlement in the district's history.
In a statement, Alibaba described the outcome as a "mutually satisfactory resolution" and said the agreement "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 company added that the settlement will bring "stricter compliance to the sale of products in the United States by third-party merchants on its e-commerce platforms."
The settlement adds another front to the regulatory pressure Alibaba faces as it seeks to maintain its U.S. business relationships, coming at a time when the company is also navigating separate disputes involving artificial intelligence practices and its designation on a Pentagon roster of Chinese military companies.