•Alibaba said on Monday that it accepted a record penalty imposed by the country’s anti-monopoly regulator. •Regulators slapped a $2.8bn fine after a probe determined that it had abused its market position for years. •The fine amounts to about 4% of the company’s 2019 domestic revenue. •The main issue for regulators was that Alibaba restricted merchants from doing business or running promotions on rival platforms. •The company said it would introduce measures to lower entry barriers and business costs faced by merchants on e-commerce platforms. •
- It is the biggest and the first Chinese tech firm to attract regulators’ attention
- The e-commerce giant indicated that while for now Alibaba is in the clear in terms of future investigations, the same could not be said for other firms in this sector.
- Chinese tech firms are a powerful force in the country, and Beijing is keen to regulate them. Alibaba’s experience is a sign of more of the same to come.
- The penalty is the latest in a chain of events targeting the company that kicked off last October, after its co-founder Jack Ma criticised regulators, suggesting they were stifling innovation.
- Shortly after the speech, Chinese regulators scuppered the share market launch of Ant Group, which is Alibaba’s sister company and China’s biggest electronic payments provider.
One minute after the announcement of the fine, the People’s Daily, the official newspaper of the Communist Party of China, published an opinion article on the Internet, saying that supervision is “a kind of love.
“Monopoly is the enemy of the market economy,” the article reads. “Regulating by law and supporting development are not contradictory, but are complementary and mutually reinforcing.”