Categories: BusinessGlobal

China Fines Alibaba Record $2.75bn for Anti-monopoly Violations

Chinese regulators have fined Alibaba Group Holding Ltd 18 billion yuan ($2.75 billion) for violating anti-monopoly rules and abusing its dominant market position, marking the highest ever antitrust fine to be imposed in the country.

The penalty, equivalent to around 4% of Alibaba’s 2019 revenues, comes amid an unprecedented regulatory crackdown on home-grown technology conglomerates in the past few months that have weighed on company shares.

Alibaba’s billionaire founder Jack Ma’s business empire has been particularly put under intense scrutiny after his stinging criticism of China’s regulatory system in late October.

In late December, China’s State Administration for Market Regulation (SAMR) announced it launched an antitrust probe into the company. That came after authorities scuttled a planned $37 billion IPO from Ant Group, Alibaba’s internet finance arm.

While the fine brings Alibaba a step closer to resolving its antitrust woes, Ant still needs to agree to a regulatory-driven revamp that is expected to sharply cut its valuations and rein in some of its freewheeling businesses.

“This penalty will be viewed as a closure to the anti-monopoly case for now by the market. It’s indeed the highest profile anti-monopoly case in China,” said Hong Hao, head of research BOCOM International in Hong Kong.

“The market has been anticipating some sort of penalty for some time … but people need to pay attention to the measures beyond the anti-monopoly investigation.”

SAMR said on Saturday that it had determined that Alibaba had been “abusing market dominance” since 2015 by preventing its merchants from using other online e-commerce platforms.

It said the practice violates China’s anti-monopoly law by hindering the free circulation of goods and infringing on the business interests of merchants.

The SAMR ordered Alibaba to make “thorough rectifications” to strengthen internal compliance and protect consumer rights.

Alibaba said in a statement posted on its official Weibo account that it “accepted” the decision and would resolutely implement SAMR’s rulings.

It said it would also work to improve corporate compliance.

The Chinese e-commerce giant said it will hold a conference call on Monday to discuss the penalty decision.

Alibaba had come under fire in the past from rivals and sellers for allegedly forbidding its merchants from listing on other e-commerce platforms.

The practice of preventing merchants from listing on rival platforms is a long-standing one, and the regulator spelled out in rules issued in February that it was illegal.

“The fine bill is a milestone and road sign with great importance,” Shi Jianzhong, antitrust consultant committee member of the State Council and professor of China University of Political Science and Law, wrote in state-backed Economic Times.

“It indicates that the antitrust law enforcement on internet platforms has entered a new era, and released clear policy signal.”

Beijing has vowed to strengthen oversight of its big tech firms, which rank among the world’s largest and most valuable, citing concerns that they have built market power that stifles competition, misused consumer data and violated consumer rights.

Besides Ma’s Alibaba, regulators have also been targeting other internet behemoths.

Although Ma has stepped down from corporate positions and earnings calls, he retains significant influence over Alibaba and Ant, and has promoted them globally at business and political events.

Ma, who commands a cult-like reverence in China, had briefly disappeared from public view since Oct. 24, when he blasted China’s regulatory system in a speech at a Shanghai forum. He reappeared in January.

Follow us on:

AriseNews

Recent Posts

Matt Gaetz To Exit Congress Following Withdrawal As DOJ Nominee Amid Controversy

Matt Gaetz has said he will not return to Congress after withdrawing as Trump’s DOJ…

2 hours ago

Tinubu Seeks Senate Approval For Oluyede As Chief Of Army Staff

President Tinubu has sought Senate confirmation of Olufemi Oluyede as Chief of Army Staff, citing…

3 hours ago

Netanyahu Risks Arrest in UK as ICC Issues Warrant Against Him For War Crimes

Israeli PM Netanyahu faces potential arrest in the UK as Downing Street pledges to fulfill…

5 hours ago

Second Australian Teen Dies from Suspected Methanol Poisoning in Laos

A second Australian teenager has died of suspected methanol poisoning in Laos, bringing to six…

5 hours ago

Simon Ekpa Arrested, Denies Being IPOB Leader + Atiku Says Tinubu’s Loans Are Bone-Crushing – Trending With Ojy Okpe

https://www.youtube.com/watch?v=mFlFl1mPGC8 The arrest of self-proclaimed Prime minister of the Biafra Republic, Simon Ekpa who was…

6 hours ago

Gatwick Airport South Terminal Evacuated, Bomb Disposal Team Deployed Suspicious Item Found In Luggage

Gatwick Airport's South Terminal was evacuated after a suspected prohibited item was found, prompting bomb…

6 hours ago