The Chinese authorities imposed a fine of US$2.8 billion on Alibaba after completing an antitrust investigation into suspected monopolistic behavior. The State Administration for Market Regulation investigated the “suspected monopolistic behavior” of e-commerce giants in December, especially its policy of forcing merchants to only sell on their platforms and preventing them from selling on rival e-commerce sites.
In a press release published on the Watchdog website, its investigation proved that the policy eliminated the country and restricted competition in the country, and hindered innovation in the online retail platform industry.
As a result of this conclusion, the regulator imposed penalties on the company under China’s anti-monopoly law, ordered the company to cease its illegal activities, and pay a fine equivalent to 4% of the country’s domestic sales.
As the New York Times pointed out, the US$2.8 billion fine will not put Alibaba’s finances at risk, but it exceeds the US$975 million fine imposed by the Chinese government on Qualcomm for violating antitrust laws in 2015.
Alibaba said in a statement to the New York Times that it will accept fines and ensure “better fulfillment of its social responsibilities.”
Last year, China began to pay close attention to technology giants, and lawmakers proposed to update the anti-monopoly law to add rules specifically for them.
In particular, Jack Ma’s business seems to have become the target of his home country, because he calls Chinese banks “state-owned pawnshops” to provide unnecessary loans during a financial summit. His executives even had to form a working group to deal with regulators every day.
In addition to the antitrust investigation of Alibaba, the Shanghai Stock Exchange also blocked the initial public offering of a financial services company founded by Ant Group in November.
Before the end of the year, the regulator ordered the company to “return to its origins” as a payment service provider and shut down the investment, lending, insurance, and wealth management services introduced over the years.