China fines Alibaba $2.8 billion in anti-monopoly probe

China fines Alibaba $2.8 billion in anti-monopoly probe

 

Chinese multinational technology company, Alibaba has been slammed with a 18.23 billion yuan ($2.8 billion) fine by a regulatory authority in China in its anti-monopoly investigation of the tech giant, saying it abused its market dominance.

In December, China’s State Administration for Market Regulation (SAMR), opened a probe into Alibaba’s monopolistic practices with its main focus on a practice that forces merchants to choose one of two platforms, rather than being able to work with both.

SAMR in a statement on Saturday, said this policy stifles competition in China’s online retail market and “infringes on the businesses of merchants on the platforms and the legitimate rights and interests of consumers,” according to a CNBC translation of a Chinese-language statement.

According to the government this policy allowed Alibaba to bolster its position in the market and gain unfair competitive advantages.

Also, Alibaba will have to file self-examination and compliance reports to the SAMR for three years in addition to the fine.

However, the company in a statement said, it accepted the penalty and will comply with the SAMR’s determination. It said it fully cooperated with the investigation, conducted a self-assessment and already implemented improvements to its internal systems.

“Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance and support from all of our constituencies have been crucial to our development,” the company said.

The company added it will hold a conference call on Monday at 8 a.m. Hong Kong time to discuss the fine.

The announcement is the latest development in China’s crackdown on its technology companies. Regulators have been increasingly concerned about the power of China’s tech giants, particularly those who operate in the financial sector.

Also, Ant Group founded by Jack Ma had its initial public offering suspended in November shortly after Chinese regulators published new draft rules on online micro-lending, a key part of the company’s business. The China Securities Regulatory Commission also summoned Ma and other Ant execs ahead of that announcement.

Ma appeared to come under fire for comments that were critical of China’s financial regulator, saying the country’s financial system was “the legacy of the Industrial Age.”

However, Ant has committed to listing and said it would help employees monetize shares.

 

 

Source: CNBC