Chinese govt slams $2bn fine on Alibaba for market monopoly
Chinese authorities have slammed a $2.8 billion (¥18 billion) fine on Alibaba Group Holding Limited, after an anti-monopoly investigation found the e-commerce company to have violated its dominant market position, Reuters News reported on Saturday.
China local media reported that the State Administration for Market Regulation announced its antitrust investigation into the company in December and a fine was placed after the investigation was concluded, Xinhua news agency reported.
Alibaba Group, the world’s largest e-commerce company was fined about four per cent of its generated revenue in 2019.
The Chinese government centred its investigation on the Alibaba Group, for behaving like a monopoly and expanding the company business into other sectors of the China economy.
The founder of the Alibaba Group, Jack Ma, publicly criticised the Chinese financial regulators during a conference in October. He has had a running battle with the authorities ever since.
In November the Chinese authorities stepped up their effort to regulate internet companies in China including Ant Group, another company owned by Jack Ma. After this move, the company suspended its $37 billion Initial Public Offer plan.
For many years, Alibaba and Ant Group of companies have enjoyed the Chinese government laissez-faire approach to businesses in the e-commerce sector before the antitrust penalties were enforced on internet companies.
Alibaba, in a letter addressed to the public on Saturday, said the company has complied with the four per cent penalties set by the Chinese regulators, while they commend the government for their support toward the country for many years.
“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. For this, we are full of gratitude and respect,” CNN reported.
“It is not lost on us that today’s society has new expectations for platform companies, as we must assume more responsibilities as part of the nation’s economic and social development,” it added.
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