Alibaba has agreed to pay $600 million to settle allegations that its e-commerce platforms were used to sell and import illegal pharmaceuticals, controlled substances, regulated chemicals, and pill-making equipment into the United States. The settlement resolves a dispute with the U.S. government over the company's alleged failure to prevent such sales.
The Hangzhou-based company, which operates major online marketplaces including Alibaba.com and AliExpress.com, acknowledged in an agreement with the Justice Department that between January 2016 and December 2024, it failed to prevent approximately 80,000 transactions involving unlawful imports that violated federal laws, including the Federal Food, Drug, and Cosmetic Act.
According to a Justice Department news release, Alibaba employees had previously raised concerns that the company's compliance controls were insufficient to stop the sale of illegal products. The release also noted that some merchants allegedly used Alibaba's messaging services to direct buyers to external platforms to facilitate these illicit sales.
Federal law enforcement agencies, including the FDA, FDIC, and IRS Criminal Investigations, conducted over 40 undercover purchases of illegal pharmaceuticals and equipment during their investigation. The resolution was structured as a non-prosecution agreement.
IRS Criminal Investigations Chief Jarod Koopman stated that the resolution "underscores IRS Criminal Investigation’s commitment to following the money and ensuring that companies operating in the United States comply fully with federal law.”