China Shows World it Can Regulate, Gives Alibaba Big Antitrust Fine
Posted on 04/10/2021
The world’s biggest online retailer is China’s Alibaba Group Holding Limited. E-commerce giant Alibaba has been smacked with a record fine equivalent to 18.2 billion RMB (US$ 2.75 billion) by China’s State Administration of Market Regulation. The fine amounts to 4% of Alibaba’s revenue in 2019. Chinese regulators saw Alibaba as abusing its dominant market position since 2015 for the sake of profit at the expense of Chinese society. Alibaba said it would accept the ruling and would “ensure its compliance”. In a statement, Alibaba said it “sincerely accepted” the penalty.
Government regulators saw Alibaba restricting competition by stopping some sellers using other platforms. Specifically Alibaba was mandating merchants to sell exclusively on its Tmall and Taobao online shopping platforms.
The Chinese government wanted to deliver the message not only to Alibaba, but to Chinese consumers.
Chinese regulators are starting to crackdown on technology companies that has usurped traditional businesses. Tencent Holdings Limited is being targeted for an anti-trust review in China.
In 2015, Qualcomm Incorporated, the world’s biggest supplier of mobile phone chips, forked over US$ 975 million for a fine in China for anticompetitive practices.