China slaps Alibaba with a record $2.75bn penaltyEuropost
The official Chinese authorities announced they had imposed a record $2.75 billion fine on the e-commerce giant Alibaba, Reuters reported. An anti-monopoly probe found Alibaba had abused its dominant market position for several years. The fine accounts for about 4% of Alibaba’s 2019 domestic revenue, comes as a result of a crackdown on technology companies and indicates China’s antitrust enforcement on internet platforms has entered a new era.
The Alibaba business empire has come under intense scrutiny in China since billionaire founder Jack Ma’s stinging public criticism of the country’s regulatory system in October, 2020. A month later, authorities scuttled a planned $37 billion IPO by Ant Group, Alibaba’s internet finance arm, which was set to be the world’s biggest ever. The State Administration for Market Regulation (SAMR) announced its antitrust probe into the company in December. 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. The SAMR said it had determined that Alibaba, which is listed in New York and Hong Kong, had been “abusing market dominance” since 2015 by preventing its merchants from using other online e-commerce platforms.
The practice, which the SAMR has previously spelt out as illegal, violates China’s antimonopoly law by hindering the free circulation of goods and infringing on the business interests of merchants, the regulator added. Besides imposing the fine, which ranks among the highest ever antitrust penalties globally, the regulator ordered Alibaba to make “thorough rectifications” to strengthen internal compliance and protect consumer rights. Alibaba said in a statement that it accepts the penalty and “will ensure its compliance with determination”.