Chinese government fines Alibaba $2.75 billion for anti-monopoly violations
China's State Administration for Market Regulation (SAMR) said in a statement Saturday that Alibaba had been abusing its strong market position since 2015 to prevent merchants from using other online e-commerce platforms.
“This penalty will be viewed as a closure to the anti-monopoly case for now by the market. It’s indeed the highest-profile anti-monopoly case in China,” said Hong Hao, head of research BOCOM International in Hong Kong.
Wium Malan, an analyst at Propitious Research in Cape Town, who publishes on the Smartkarma platform, echoed the sentiment, describing the fine as a “clear statement of intent”. It said such practices impacted the free movement of goods and services, infringing on a merchant's business interests, and in breach of the country's anti-monopoly laws. The Alibaba business empire has come under intense scrutiny in China since billionaire founder Jack Ma’s stinging public criticism of the country’s regulatory system in October.
The fine is more than double the $975 million paid in China by Qualcomm, the world’s biggest supplier of mobile phone chips, in 2015 for anticompetitive practices.
According to South China Morning Post (owned by Alibaba), the fine is more than double the previous record of 6.1 billion yuan paid by chip-maker Qualcomm. Alibaba, launched in 1999, operates retail, business-to-business, and consumer-to-consumer platforms. The fine, about 4% of Alibaba’s 2019 domestic revenues, comes amid a crackdown on technology conglomerates and indicates China’s antitrust enforcement on internet platforms has entered a new era after years of a laissez-faire approach.
Ma, one of China’s richest and most prominent entrepreneurs, disappeared temporarily from public view after criticizing regulators in a November speech. That was followed days later by the Ant Group suspension, though finance specialists said regulators already had been worried Ant lacked adequate financial risk controls.
The agenda was that Ant Group should return to its roots in payments and bring more transparency to transactions. Ma later disappeared from the public view, triggering speculation of him going “missing”.
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