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8 bn penalty on Jack Ma's Alibaba Group in monopoly probe | Business Standard News

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China imposes $2.8 bn penalty on

Jack Ma's Alibaba Group in
monopoly probe
The penalty is equivalent to 4% of Alibaba's domestic sales in 2019, China's State Administration for Market
Regulation said in a statement on Saturday

Topics

Alibaba | Jack Ma | China

Bloomberg News 
Last Updated at April 10, 2021 09:14 IST

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6/25/2021 China imposes $2.8 bn penalty on Jack Ma's Alibaba Group in monopoly probe | Business Standard News

The logo of Alibaba Group is seen at its office in Beijing, China

China imposed a record fine of 18.2 billion yuan ($2.8 billion) on

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Alibaba Group Holding Ltd. after an anti-monopoly probe found
that it had abused its dominant market position.
The penalty is triple the previous high of almost $1 billion that
Qualcomm Inc. had to pay in 2015. The fine is equivalent to 4% of
Alibaba’s domestic sales in 2019, China’s State Administration for
Market Regulation said in a statement on Saturday.
Alibaba will likely have to change some of its practices, like
merchant exclusivity, that critics say helped it become China’s
largest e-commerce operation. The company founded by
billionaire Jack Ma used its platform rules and technical methods
like data and algorithms “to maintain and strengthen its own
market power and obtain improper competitive advantage,” the
investigation concluded.
Alibaba’s practice of imposing a “pick one from two” choice on
merchants “shuts out and restricts competition“ in the domestic
online retail market, according to the statement.

The Hangzhou-based company will be required to implement

“comprehensive rectifications,” including strengthening internal
controls, upholding fair competition, and protecting businesses on
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its platform and consumers’ rights, the regulator said. It will be
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June, 2021! required to submit reports on self-regulation to the authority for

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“China’s record fine on Alibaba may lift the regulatory overhang

that has weighed on the company since the start of an anti-monopoly probe in late December,”
Bloomberg Intelligence analysts Vey-Sern Ling and Tiffany Tam said, describing the fine as a small price
to pay to do away with that uncertainty.

The company said it will host a conference call to discuss the penalty on Monday morning in Hong Kong.

“Alibaba accepts the penalty with sincerity and will ensure its compliance with determination. To serve
its responsibility to society, Alibaba will operate in accordance with the law with utmost diligence,
continue to strengthen its compliance systems and build on growth through innovation,” the company
said in a statement on Saturday.

Alibaba has been under mounting pressure from Chinese authorities since Ma spoke out against China’s
regulatory approach to the finance sector in October. Those comments set in motion an unprecedented
regulatory offensive, including scuttling plans for Ma’s Ant Group Co.’s $35 billion initial public offering.

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First Published: Sat, April 10 2021. 08:03 IST

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