The sanction is equivalent to around 4% of Alibaba’s revenue in 2019 and comes amid Beijing’s unprecedented regulatory crackdown.
Chinese regulators fined Alibaba Group Holding Ltd 18 billion yuan ($ 2.75 billion) for violating anti-monopoly rules and abusing its dominant position in the market, marking the la highest ever inflicted in the country.
The sanction, equivalent to roughly 4% of Alibaba’s revenue in 2019, came amid an unprecedented regulatory crackdown on local tech conglomerates in recent months that have weighed on the company’s shares.
The business empire of billionaire Alibaba founder Jack Ma has come under particular scrutiny after his harsh criticism of China’s regulatory system at the end of October.
At the end of December, China’s State Administration for Market Regulation (SAMR) announced that it had launched an antitrust investigation into the company.
It came after authorities halted a planned $ 37 billion IPO by Ant Group, Alibaba’s internet financing arm.
SAMR said on Saturday that after an investigation launched in December, it determined that Alibaba had “abused market dominance” since 2015 by preventing its merchants from using other online e-commerce platforms.
He said the practice violates China’s anti-monopoly law by impeding the free flow of goods and harming the business interests of traders.
SAMR ordered Alibaba to make “deep rectifications” to strengthen internal compliance and protect consumer rights.
“This sanction will be considered as a closure of the anti-monopoly file for the moment by the market. It is indeed the most publicized anti-monopoly case in China, ”said Hong Hao, BOCOM International research manager in Hong Kong.
“The market has been anticipating some sort of sanction for some time … but people should pay attention to measures beyond the anti-monopoly investigation, like divesting media assets.”
Alibaba said in a statement posted on its official Weibo account that it “accepts” the decision and will resolutely implement SAMR’s decisions. He said he would also work to improve business compliance.
The Chinese e-commerce giant said it will host a conference call on Monday to discuss the sanction decision.
Alibaba has been criticized in the past by rivals and vendors for allegedly banning its merchants from registering on other e-commerce platforms.
The practice of preventing traders from registering on competing platforms has been a long-standing practice, and the regulator clarified in rules published in February that it was illegal.
“The fine bill is a milestone and a road sign of great importance,” wrote Shi Jianzhong, member of the State Council’s antitrust advisory committee and professor at the Chinese University of Political Science and Law. , in the Economic Times.
“This indicates that Internet platform antitrust law enforcement has entered a new era and issued a clear political signal.”