China on Saturday said it was imposing a record $ 2.8 billion fine on the e-commerce title Alibaba for monopolistic business practices, the toughest government action to date in its campaign to regulate the country’s internet giants more closely.
Beijing’s market watchdog began investigating Alibaba in December for possible antitrust violations, including preventing traders from selling their goods on other shopping platforms. The regulator said on Saturday that its investigation had concluded that Alibaba was hampering competition in online retail in China, affecting innovation in the internet economy and harming consumers’ interests.
The fine on Alibaba, one of China’s most valuable private enterprises, exceeds the $ 975 million antitrust penalty imposed by the Chinese government on Qualcomm, the US disk giant, in 2015. However, this is probably not a significant dive into Alibaba’s fortunes. The regulator said the fine represents 4 percent of Alibaba’s domestic sales in 2019. The group reported profits of more than $ 12 billion in the last three months of 2020 alone.
Alibaba said in a statement that it would “sincerely” accept the punishment and strengthen its internal systems “to better carry out its social responsibilities.”
Over the past decade, Alibaba’s business has expanded into shopping in logistics, groceries, entertainment, social media, travel bookings and more. Like its fellow online stores, Alibaba said the scale of its business helps make each of its services more useful. However, critics say that the size of the company reduces the playing field for competitors and limits the choice of consumers.
China began exploring its technological giants last year. The market regulator has proposed updating the country’s antimonopoly law with a new provision for major internet platforms such as Alibaba’s. In November, officials halted plans by Alibaba’s sister company, the finance-focused Ant Group, to make it public and intensified oversight of internet funding.
In December, it opened the antimonopoly investigation into Alibaba – a frightening turnaround in the fate of Jack Ma, the co-founder of Alibaba, who has long portrayed people in China as an icon of enterprises.
Skepticism about the influence of large Internet companies is also growing in the United States and Europe. Western regulators, like Google, have repeatedly fined Goliaths in recent years for various antitrust violations. But such fines have not changed the nature of the businesses’ businesses in general enough to alleviate concerns about their power.