Fines are equivalent to about 4 percent of Alibaba’s revenue in 2019 and come amid Beijing’s unprecedented lawsuit.
Chinese regulators have fined Alibaba Group Holding Ltd 18 billion yuan ($ 2.75 billion) for violating antimonopoly rules and abusing its dominant market position, which imposed the highest antitrust fine in the country.
The fine, equivalent to about 4 per cent of Alibaba’s revenue in 2019, comes amid unprecedented regulatory repression from the home-made technology conglomerates in the past few months that weigh in on the company’s shares.
The agenda of Alibaba, billionaire founder Jack Ma, has been particularly scrutinized after his fierce criticism of China’s regulatory system in late October.
At the end of December, China’s State Administration for Market Regulation (SAMR) announced that it had launched an antitrust investigation into the company.
This came after authorities suspended a planned $ 37 billion scholarship from Ant Group, Alibaba’s internet finance arm.
SAMR said on Saturday after an investigation launched in December, it found that Alibaba had been abusing market dominance since 2015 by withholding its merchants from using other online e-commerce platforms.
The practice violates China’s antimonopoly law by impeding the free movement of goods and violating the business interests of traders.
The SAMR ordered Alibaba to make “thorough corrections” to strengthen internal compliance and protect consumer rights.
‘This fine will be considered by the market for the time being as a conclusion of the anti-monopoly case. This is indeed the biggest anti-monopoly case in China, ”said Hong Hao, head of research at BOCOM International in Hong Kong.
“The market has been expecting a fine for some time … but people need to pay attention to measures outside the anti-monopoly investigation, such as the sale of media assets.”
Alibaba said in a statement posted on its official Weibo account that it “accepts” the decision and that it will resolutely implement SAMR’s decisions. It is said that it will also work to improve corporate compliance.
The Chinese e-commerce giant has said it will hold a conference on Monday to discuss the penalty decision.
Alibaba has come under fire in the past among opponents and sellers for allegedly banning traders from listing on other e-commerce platforms.
The practice of preventing traders from listing on competing platforms has been around for a long time, and the regulator has ruled in rules issued in February that it is illegal.
“The fine is a milestone and a traffic sign of great importance,” Shi Jianzhong, a member of the State Council for Antitrust Consultants and a professor at the Chinese University of Political Science, wrote in the state-sponsored Economic Times.
“This indicates that the monitoring of legislation on internet platforms has entered a new era and that it has announced a clear policy instrument.