China slaps USD 2.78 billion fine on Alibaba over anti-competitive tactics

0
395

As Beijing tightens the screws on the country’s tech giants, China’s antitrust regulators slapped a record fine of USD 2.78 billion on Alibaba Group, the world’s largest e-commerce firm, for exploiting its dominant marketplace.

China’s State Administration for Market Regulation (SAMR) slapped a fine of 18.23 billion yuan (USD 2.78 billion) on Alibaba, led by the country’s top billionaire Jack Ma, bringing an end to a months-long investigation that started on Christmas Eve last year, setting a precedent for the ruling Communist Party to use anti-monopoly laws to control tech giants.

According to the SAMR, it has issued an administrative penalty judgment under China’s anti-monopoly rule, requiring Alibaba Group to cease illegal activities and imposing a fine of 4% on its domestic revenue of 455.71 billion yuan in 2019, totaling 18.23 billion yuan.

According to state-run CGTN TV, the market regulator concluded the four-month investigation, alleging that Alibaba has been exploiting its market supremacy since 2015 by banning merchants from opening stores or engaging in promotional activities on competing platforms. According to the SAMR, Alibaba’s “pick one out of two” requirement harmed consumers’ interests while restricting competition among online retail platforms and infringing on merchants’ legitimate rights.

Following regulators’ decision in November to postpone the stock market debut of Ant Group, a finance platform spun off from Alibaba, the development is a new setback for the e-commerce firm and its billionaire founder Ma. After criticizing regulators in a speech in November, Ma, one of China’s most influential entrepreneurs, vanished from public view for a time. The Ant Group was then suspended a few days later.

“Alibaba recognizes the penalty with honesty and will ensure its enforcement with determination,” the company said in a statement on Saturday. It also promised to implement several steps to lower platform operating thresholds and lower platform operating costs, resulting in a more open and competitive platform climate for companies.

However, according to Zhai Wei, executive director of the Competition Law Research Centre at East China University of Political Science and Law in Shanghai, the fine sends a strong message to the world that if Big Tech companies like Alibaba break the law with their monopolistic business models, China will retaliate harshly. As per observers, the fine demonstrates China’s intention to take action against internet platforms it considers to be too large and is intended to serve as a warning to them. As per observers, the fine demonstrates China’s intention to take action against internet platforms it considers to be too large and is intended to serve as a warning to them.

Follow and connect with us on FacebookLinkedIn & Twitter

LEAVE A REPLY

Please enter your comment!
Please enter your name here