Alibaba fined US$2.75bn for anti-monopoly violations by Chinese regulators
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Chinese regulators have fined Alibaba 18 billion yuan ($2.75 billion) – around 4 percent of its revenues in 2019 – for violating anti-monopoly rules and abusing its dominant market position.
The State Administration for Market Regulation (SAMR) said that after an investigation launched in December, it had determined that Alibaba Group had been “abusing market dominance” since 2015 by preventing its merchants from using other online e-commerce platforms.
It said the practice violates China’s anti-monopoly law by hindering the free circulation of goods and infringing on the business interests of merchants.
The SAMR ordered Alibaba to make “thorough rectifications” to strengthen internal compliance and protect consumer rights.
The company said in a statement posted on its official Weibo account that it “accepted” the decision and would resolutely implement SAMR’s rulings. It said it would also work to improve corporate compliance.
The practice of preventing merchants from listing on rival platforms is a long-standing one. The market regulator spelled out in rules issued on February that it was illegal.
Alibaba has also been under heavy scrutiny since its founder Jack Ma criticized China’s regulatory system in October.
Ant Group, Alibaba’s fintech arm, also saw its $37 billion listing plans dramatically suspended by authorities in November.
Questions & Answers
Q.What specific anti-monopoly violation did Alibaba commit?
What specific anti-monopoly violation did Alibaba commit?
Alibaba was found to be preventing its merchants from listing their products on rival online e-commerce platforms. This practice was deemed to abuse its dominant market position and hinder the free circulation of goods, infringing on merchant interests.
Q.When did Chinese regulators start investigating Alibaba for these violations?
When did Chinese regulators start investigating Alibaba for these violations?
The investigation into Alibaba's practices by the State Administration for Market Regulation was launched in December. The regulators determined the company had been abusing its market dominance since 2015.
Q.What was Alibaba's response to the fine and ruling?
What was Alibaba's response to the fine and ruling?
Alibaba stated on its official Weibo account that it accepted the decision and would resolutely implement the regulator's rulings. The company also committed to improving its corporate compliance going forward.
Q.How does this fine relate to Alibaba's revenues?
How does this fine relate to Alibaba's revenues?
The fine of 18 billion yuan, equivalent to $2.75 billion, represents approximately 4 percent of Alibaba's revenues recorded in 2019. This substantial penalty reflects the scale of the company's operations.
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