WASHINGTON, D.C. — Alibaba has agreed to pay $600 million to settle a dispute with the U.S. government, resolving allegations that the company's e-commerce platforms facilitated the sale and import of illegal pharmaceuticals, controlled substances, regulated chemicals, and pill-making equipment into the U.S. The agreement, which includes a non-prosecution agreement with the Justice Department, was finalized on July 1, 2026.

The U.S. government alleged that AUS Merchant Services, Alibaba's U.S.-based payment processor, violated federal law by not preventing merchants from selling and importing illegal products through Alibaba.com and AliExpress.com. Alibaba acknowledged to the Justice Department that approximately 80,000 product sales between January 2016 and December 2024 involved unlawful imports, which violated the Federal Food, Drug, and Cosmetic Act and other federal laws.

Alibaba employees raised concerns that the company's compliance controls were inadequate and failed to prevent the sale of illegal products. In some instances, merchants used Alibaba's messaging service to direct buyers to third-party messaging platforms to facilitate illegal sales. Law enforcement officers from agencies including the FDA, FDIC, and IRS-CI conducted over 40 undercover purchases of pharmaceuticals and equipment that were illegal to import into the U.S.

Jarod Koopman, Chief of IRS Criminal Investigations, stated that the settlement "underscores IRS Criminal Investigation's commitment to following the money and ensuring that companies operating in the United States comply fully with federal law." A representative for the firm stated that "the firm and the U.S. government reached a mutually satisfactory resolution to bring stricter compliance to the sale of products in the U.S. by third-party merchants on its e-commerce platforms."