The punishment is equivalent to about 4% of Alibaba’s revenue in 2019 and comes amid unprecedented crackdown on Beijing regulations.
Chinese regulators fined Alibaba Group Holding Ltd 18 billion yuan ($ 2.75 billion) for violating antitrust rules and abusing its dominant market position, marking the largest antitrust fine ever imposed in the country.
The penalty, equivalent to about 4% of Alibaba’s revenue in 2019, came amid unprecedented regulatory crackdown on technology conglomerates grown in the country over the past few months, which have influenced the company’s actions.
The business empire of billionaire Alibaba founder Jack Ma has come under heavy scrutiny following his painful criticism of China’s regulatory system in late October.
In late December, China’s State Administration for Market Regulation (MRSA) announced that it had launched an antitrust probe into the company.
This came after authorities stopped a planned $ 37 billion IPO from Ant Group, Alibaba’s Internet financing group.
SAMR said on Saturday that, following a December investigation, it had determined that Alibaba had been “abusing market dominance” since 2015, preventing traders from using other online e-commerce platforms.
He said the practice violates China’s antitrust law by impeding the free movement of goods and violating traders’ trade interests.
MRSA has ordered Alibaba to make “thorough corrections” to strengthen internal compliance and protect consumer rights.
“This sanction will be seen as a closure of the antitrust case for the time being by the market. It is indeed the highest antitrust profile in China, ”said Hong Hao, head of research at BOCOM International in Hong Kong.
“The market has been anticipating some kind of penalty for some time … but people need to pay attention to measures beyond the antitrust investigation, such as the divestment of media assets.”
Alibaba said in a statement posted on its official Weibo account that it “accepted” the decision and will resolutely implement the MRSA decisions. He said it will also work to improve corporate compliance.
The Chinese e-commerce giant said it would hold a conference call on Monday to discuss the penalty decision.
Alibaba had been attacked in the past by rivals and vendors for allegedly banning its traders from listing on other e-commerce platforms.
The practice of preventing traders from being listed on rival platforms has been around for a long time, and regulators said in February that it was illegal.
“The fine bill is a milestone and a road sign of great importance,” Shi Jianzhong, a member of the State Council’s antitrust advisory committee and a professor at China University of Political Science and Law, wrote in the Economic Times. supported by the state.
“It indicates that the application of antitrust law on Internet platforms has entered a new era and launched a clear policy signal.”