Alibaba slapped with $2.8 billion fine for violating anti-monopoly regulations

The Chinese government has slapped Alibaba Group with a whopping $2.8 billion fine for violating anti-monopoly regulations. The e-commerce company was under investigation by the government, since December, for suspected monopolistic conduct.

This is latest development in China’s crackdown on its technology companies. Regulators, as per CNBC, have been increasingly concerned about the power of China’s tech giants, particularly those who operate in the financial sector. However, this is not the first time that Jack Ma, founder of Alibaba and Ant Group, has come under scrutiny.

China’s State Administration for Market Supervision, in an official statement, described Alibaba’s behaviours as having “eliminated and restricted competition in the online retail platform service market” as well as having “infringed on the business of merchants on the platform”.

The government said that choose one policy and others allowed Alibaba to bolster its position in the market and gain unfair competitive advantages. The fine is 4% of Alibaba’s total 2019 sales in China, which was over $69 billion. Regulators said the company will have to file self-examination and compliance reports to the SAMR for three years.

The authorities imposed the penalties on the merits of several legal provisions under China’s Anti-monopoly Law. According to the SAMR’s administrative punishment written decision, Alibaba has abused its market dominance position and violated anti-monopoly laws.  It has forbidden, as per Chinese media reports, businesses on its platforms to open online shops on other platforms deemed as competitors by Alibaba. Those shops are also banned from participating in other online platforms’ promotional campaigns. Businesses that didn’t comply with these rules were punished by the company, such as disqualifying them launching promotional activities and diminishing their access to consumer searches.

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Alibaba, in a press statement, said it would accept the fine and ensure its compliance with determination. It also said that it fully cooperated with the investigation, conducted a self-assessment and already implemented improvements to its internal systems. “Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance and support from all of our constituencies have been crucial to our development,” the company said. “The penalty issued today served to alert and catalyze companies like ours. It reflects the regulators’ thoughtful and normative expectations toward our industry’s development. It is an important action to safeguard fair market competition and quality development of internet platform economies.”