Alibaba-E-commerce giant, and its ‌U.S.-based payment processor have agreed to pay $600 million to resolve allegations that they failed to prevent illegal drug sales, the U.S. Justice Department said on Wednesday.

The companies entered into non-prosecution agreements to resolve allegations that they violated the U.S. Federal Food, Drug, and Cosmetic Act by failing to prevent merchants from selling and importing illegal drugs, chemicals and pill presses into the United States through Alibaba's e-commerce platforms.

The DOJ revealed that third-party sellers bypassed the Chinese technology and e-commerce giant platform's security mechanisms to complete roughly 80,000 prohibited sales to buyers in the U.S., generating a combined gross merchandise value of more than $200 million.

Shipments included unapproved or misbranded foreign pharmaceuticals, highly restricted List I and II regulated chemicals, and industrial pill presses/counterfeiting equipment heavily used in illicit drug manufacturing.

The Justice Department said Alibaba and its U.S.-based payment processor, AUS Merchant Services, agreed as part of the deal to accept responsibility for the acts of their officers and employees and enhance their compliance programs.

"This settlement 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," Alibaba said in a statement.

According to the Justice Department, Alibaba as part of the deal admitted that it failed from 2016 to 2024 to prevent about ‌80,000 product sales of chemicals, drugs and pharmaceutical counterfeiting equipment that were imported from overseas.

Alibaba employees at different intervals raised concerns about whether illegal products were being sold and whether the company's compliance measures were inadequate to prevent such sales from occurring, the department said.

The U.S. government said the U.S.-based payment processor's anti-money laundering compliance program failed to prevent some merchants from using its services to facilitate the sale and importation of prohibited products.

"Today's resolution reflects the Department of Justice’s commitment to ensuring that companies operating e-commerce and digital payment platforms keep illegal, unapproved, misbranded, and dangerous foreign pharmaceuticals off their marketplaces,” Assistant U.S. Attorney General Brett Shumate said in a statement.