Alibaba fined $2.75 billion in China for violating anti-monopoly rules

Alibaba Group Holdings Ltd, the tech giant in China, has been slapped with a record 18 billion yuan, approximately $2.75 billion, after a probe related to anti-monopoly found that the company abused its dominant market position for years.

The State Administration for Market Regulation in China said that 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.


Alibaba

This practice violates China’s antimonopoly law by hindering the free circulation of goods and infringing on the business interests of merchants, the regulator added. Apart from the highest-ever antitrust penalty globally, the company has been asked to make “thorough rectifications” to strengthen internal compliance and protect consumer rights.

The fine imposed on the Chinese tech giant accounts for about 4 percent of Alibaba’s domestic revenues in 2019, reports Reuters. It comes amid a crackdown on technology conglomerates and indicates China’s antitrust enforcement on internet platforms has entered a new era.

Alibaba came under intense scrutiny in its home country after the company’s billionaire founder Jack Ma’s stinging public criticism of the country’s regulatory system in October last year. 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.

In December last year, the State Administration for Market Regulation (SAMR) announced its antitrust probe into the company. After this record fine, Ant Group still needs to agree to a regulatory-driven revamp that could significantly cut its valuations and rein in some of its freewheeling businesses.

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Via: gizmochina.com

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