WASHINGTON, D.C. — The Justice Department concluded its investigation into Chinese online retailer Alibaba and its U.S. payment processing company, AUS Merchant Services Inc., by entering into a non-prosecution agreement that included $600 million in penalties and forfeitures. Under the agreement, Alibaba admitted to misdemeanor violations, though multiple sources with knowledge of the matter stated prosecutors believed they had sufficient evidence to prove felony violations of the Food, Drug and Cosmetic Act.

Public records indicate that Alibaba and AUS Merchant Services failed to prevent the sale of illicit drugs, chemicals, and pill presses to American consumers over an eight-year period. Employees had previously alerted Alibaba to compliance issues concerning the sale of dangerous items.

Several people familiar with the details stated that a senior official in then-Deputy Attorney General Lisa Monaco's office urged staff to continue the investigation rather than settling for a lesser outcome during the Biden administration. Career prosecutors recommended that Justice Department leadership pursue a deferred prosecution agreement requiring Alibaba and AUS Merchant Services to admit to felony offenses. One person familiar with the strength of the evidence called the resolution "beyond disappointing."

One person familiar with the case, speaking anonymously, stated: "There was egregious conduct by a Chinese-owned company. An NPA is not even a slap on the wrist." Lisa Gilbert, co-president of the nonprofit consumer advocacy group Public Citizen, stated: "In this context, where Americans' health and safety and well-being is on the line, it has real-life ramifications to withhold accountability for corporate wrongdoing." Gilbert added: "President Trump always talks of being tough on crime, but his administration guts enforcement for corporate law-breakers."

A Justice Department spokesperson said: "Ensuring the safety of our nation's food supply is a top priority for the Trump administration. However, this Department of Justice does not believe in regulation by prosecution." The spokesperson concluded: "When righting wrongs, both civil and criminal options are on the table, and our prosecutors will always work within the bounds of our enforcement priorities to hold bad actors accountable to the fullest extent possible."

The investigation into Alibaba began during President Trump's first administration and involved investigators from multiple agencies. The Food, Drug and Cosmetic Act, enacted in 1938, prohibits the sale, distribution, or manufacturing of counterfeit, adulterated, or misbranded drugs, medical devices, food, supplements, and cosmetics.