Photographer: Marlene Awaad / Bloomberg
Photographer: Marlene Awaad / Bloomberg
Sign up for Next China, a weekly email about where the nation is and where it will go next.
China has just imposed a record antitrust fine on Alibaba Group Holding Ltd. The company thanked the government, and investors breathed a sigh of relief.
Alibaba’s US revenue rose 9.3% on Monday in New York, the biggest jump in four years. For Jack Ma, the founder of the e-commerce giant, this meant that his fortune increased by $ 2.3 billion to $ 52.1 billion, according to Bloomberg Billionaires Index.
The $ 2.8 billion fine is less severe than some investors feared and is based on only 4% of the company’s domestic sales in 2019, well below the 10% maximum allowed under Chinese law. While the internet giant will have to adapt the way it operates, its vice president said regulators would not impose a radical overhaul of its e-commerce strategy, and its chief executive said Alibaba was ready to move on.
“Alibaba would not have achieved our growth without sound regulation and government services, and critical oversight, tolerance and support from all our constituencies have been crucial to our development,” the company said in an open letter. “For this, we are full of gratitude and respect.”
Read also: Register Alibaba Fine shows that China’s great technology can not fight back
Ma, who until last year was the richest person in China, has lost billions since his nation’s regulators began an antitrust campaign, halting the initial public offering of his payment company Ant Group Co., just two days before for it to be published. He is now the third richest person in China, after Zhong Shanshan from the bottled water company Nongfu Spring Co. and Tencent Holdings Ltd. Pony Ma.
Separately, the central bank of China ordered Ant to become a financial-holding company that would be regulated more like a bank. The move, announced on Monday, will have far-reaching implications for the company’s growth and its ability to continue with an initial public offering. Alibaba shares opened 3.4% in Hong Kong on Tuesday.
– With the assistance of Coco Liu
(Updates to include the ant review and stock move in the last paragraph)