Alibaba Fined $2.78 Billion by China State Regulator for Anti-Monopoly Practices
10th April 2021 | Hong Kong
The State Administration for Market Regulation (SAMR) of China, has fined Alibaba Group $2.78 billion (CNY 18.23 billion) for anti-monopoly practices, using its market dominance by preventing its merchants from using other online e-commerce platforms. Alibaba had ran promotions on its online platforms for online merchants, and pressured online merchants to “pick 1 from 2” – picking Alibaba platform instead of a competitor.
“ Alibaba Fined $2.78 billion for Anti-Monopoly Practices “
Alibaba to Pay $2.78 Billion, to Improve Processes
In an official statement released by the State Administration for Market Regulation (SAMR) of China on 10th April 2021, the investigation on Alibaba Group anti-monopoly practices had started in December 2020. The investigation revealed Alibaba Group had violated China’s anti-monopoly law and have imposed a fine of $2.78 billion (CNY 18.23 billion) representing around 4% of Alibaba’s 2019 revenue. Alibaba Group had also been instructed to strengthen its internal processes and to protect merchant and consumer interests.
Alibaba released a statement shortly that it will accept the fine and will comply with the order from the State Administration for Market Regulation (SAMR) of China.
Largest Anti-Competition Fine Imposed in China
The $2.78 billion (CNY 18.23 billion) fine to Alibaba is the largest fine imposed in China for anti-competition practices.
In 2015, United States technology company Qualcomm paid a then-record $975 million (CNY 6 billion) fine for anti-competitive practices. The $975 million fine represents 8% of Qualcomm sales in China for 2013. The maximum fine allowed in China by state regulator is 10% of sales.
Alibaba Group under Scrutiny in China
In November 2020, Ant Group planned IPO that will raise $34.5 billion and create a Chinese financial technology giant with more than $300 billion market capitalization, has been suspended by both Shanghai and Hong Kong Exchange on Tuesday (3/11/20).
In March 2021, the Chinese government have directed internet and technology giant Alibaba Group to sell or reduce its vast media assets, including Hong Kong’s South China Morning Post (SCMP), in a move to reduce its massive influence on public opinions.
Alibaba was founded in 1999 by Jack Ma and 17 friends and students in China. Today, it is one of the world’s largest e-commerce and technology company in the world.
Related:
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