Chinese authorities have fined Alibaba Group holding Ltd. $2.8 Billion (18 billion yuan) after an anti-monopoly enquiry. Alibaba Group is a Chinese multinational company founded in 1999 by Jack Ma. The company deals in diversified sectors such as retail, technology and e-commerce. Currently, the Company is facing intense scrutiny by the Chinese regulators.
The company was violating the anti-monopolistic rules and abusing its market position in China. It is the highest ever fine imposed in the country.
The $2.8 billion fine imposed on Alibaba is equal to 4% of Alibaba Company’s 2019 revenue. The penalty would affect the current market share of the group in China.
Last December, the State Administration for Market Regulation (SAMR) of China declared to investigate the Company, as it was found that the company had broken antitrust monopoly law. On Saturday the regulators informed that the company is breaking monopoly rules, affecting the retail market competition and e-commerce market, and impact the consumer’s interest.
The regulators stated in the investigation that, Alibaba group used different tactics and rules such as data and algorithm, to increase its market share and strengthen its business.
The head of research BOCOM International, Mr. Hng Hao stated that, “This penalty would be accepted as a closure to the anti-monopoly case for now by the market. It is indeed the highest-profile anti-monopoly case in the China country.”
Angela Zhang, the director of the Centre for Chinese Law at Hongkong University said, “This high penalty has put the tech giant into the media spotlight and this message sends a strong signal to the other online sectors that this kind of operation will not be tolerated.”
According to SAMR reports, they stated that Since 2015 Jack Ma’s Alibaba Group is cheating on the market and breaking the anti-monopoly rules. It’s abusing the dominant market by stopping its merchant to use other internet websites and platforms.
SAMR regulators ordered the Alibaba group to rectify their mistakes and protect customer rights.
In Beijing on Saturday, SAMR stated that Alibaba group punished its merchant who sold products on Alibaba and other online platforms. The Company announced that “it will hold a conference on Monday at 8:00 AM Hongkong time to discuss about the penalty.”
The director of Beijing Zhongwen Law Company, Mr. Wu Ge, said that, “The fine indicates that internet platform should also obey the laws and created real value for consumers – not just chase profits or make profitability their top priority.”
Since Last October 2020, When Jack Ma’s spoke against the Chinese government’s approach to the finance sector, after that the company came under a huge pressure of investigation by the regulation.
After the investigation, the Chinese government had strictly warned the other tech giant to operate legally and obey all the regulations implemented by SAMR.
According to reports the Company stated that it accepts the penalty by the SAMR and will follow all the protocols instructed by the SAMR regulators. Alibaba group on Saturday stated that it accepts the fine and stated that it operates according to the guidelines and regulations imposed by the government. It ensures to follow all rules abide by the law carefully.
