Business & Economy

China’s Alibaba to pay record fine of $2.75 billion in anti-monopoly probe

Beijing, Apr 10 (EFE).- Chinese regulators have slapped a record fine of 18 billion yuan ($2.75 billion) on Alibaba in an anti-monopoly probe against the e-commerce giant.

Chinese regulators have accused the firm of violating antitrust regulations and abusing its market position.

The penalty, equivalent to 4 percent of the company’s revenue in 2019, is the record fine imposed in any Chinese antitrust investigation.

The State Administration for Market Regulation launched a probe against the Chinese company in December last year after authorities started closely monitoring local technology conglomerates in the past few months.

The market regulator said its probe has found that Alibaba has been “abusing market dominance” since 2015 as it prevented its merchants from other e-platforms.

Alibaba and Tencent are among the Chinese tech giants that have been in the crosshairs of the Chinese regulators.

Alibaba founder Jack Ma’s business has been under the scanner after the billionaire entrepreneur launched a stinging criticism of China’s financial regulatory system in October last year.

The regulator began the probe in December after the authorities prevented the $37 billion IPO of Ant Group, Alibaba’s financial subsidiary that owns China’s largest digital payment platform Alipay.

It would have been the world’s largest stock market debut for any company.

The fine is more than double the previous record of 6.1 billion yuan imposed on Qualcomm, the world’s largest supplier of mobile chips, in 2015.

According to the market regulator, Alibaba abused its position and forced its traders to stick to its online platform that violated their rights.

Such practices “violate the antitrust laws” and impede the free movement of goods, the regulator said.

It also ordered Alibaba to undertake “comprehensive rectifications” in its conduct and strengthen internal compliance and protect consumer rights.

Alibaba said, in a statement, that it accepted the penalty “with sincerity and will ensure its compliance with determination.”

“To serve its responsibility to society, Alibaba will operate in accordance with the law with utmost diligence, continue to strengthen its compliance systems and build on growth through innovation,” the statement said.

Competitors and vendors have accused the company in the past of monopoly and forbidding suppliers to join other e-commerce platforms.

On Saturday, People’s Daily, the mouthpiece of the ruling Communist Party of China, said the heavy penalty did not mean that the authorities overlook the “important role of internet platforms in economic and social development.”

The newspaper said the fine also did not mean “any change in the state’s attitude of supporting internet platforms.”

It said the penalty was to promote the healthy and continuous development of the country’s internet industry. EFE


Related Articles

Back to top button