Alibaba fined $2.8bn amid Beijing’s regulatory crackdown

Jack Ma Yun, the co-founder and former executive chairman of Alibaba Group. [Image: Courtesy]

Global online retailer Alibaba has been sued by China’s State Administration for Market Regulation (SAMR) for violating anti-monopoly laws.

Becoming the highest anti-trust fine to be imposed in the Chinese state, the company has been ordered to pay a fine dancing to the tunes of 2.8 billion dollars which amounts to 4% of its revenue in 2019. This record beats the 2015 Qualcomm 975 million dollar fine.

According to SAMR, who launched an anti-trust investigation on the company in December, Alibaba abused its market supremacy by preventing merchants from using other platforms thus restricting competition. It further states that, practicing, monopoly hinders free circulation of goods and infringes merchants’ business interests thus violation of anti-monopoly regulations.

In a statement through an open letter, the company said it has accepted the penalty and will comply with the rules.

“Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance and support from our constituencies have been crucial to our development. For this, we are full of gratitude and respect.”

The move comes just a few months after business mogul and co-founder Jack Ma was under fire for criticizing the Chinese financial system for operating with a “pawn-shop mentality.”

In his opinion, Hong Hao who is the head of research at BOCOM, points out that for now, the penalty will be viewed as a closure to the anti-monopoly case by the market.