Chinese regulators have slapped a record fine of USD 2.8 billion on Alibaba for abusing its dominant position for several years. The authorities have finished an anti-trust investigation against the e-commerce giant. A probe into the company’s monopolistic conduct was launched in December by the State Administration for Market Regulation. The investigation was around a policy of Alibaba that forced merchants to sell their products on its platform exclusively. The policy also stopped them from approaching its rival e-commerce websites. In a release posted on its website, the watchdog said that it found that the policy adopted by Alibaba restricted and eliminated competition. “It also hindered innovation in the online retail platform sector,” the regulator said.
As a result, Alibaba has been penalized in accordance to the antimonopoly law of China. The regulator has asked the e-commerce company to stop all illegal activities. Additionally, it has been asked to pay a fine of 4 per cent of its sale in the country. However, the amount is not big enough for Alibaba to put its finances in danger. But it is definitely much more than the penalty imposed on Qualcomm way back in 2015. The company was asked to pay USD 975 million for violating antimonopoly law. Reacting to the development, Alibaba said that it would accept the penalty. “The company accepts the penalty and would make sure that all its social responsibilities are carried out in a better way.”
China tightened its vigil on tech giants last year. Lawmakers even proposed an update to the law so that rules specific to them can be incorporated. Alibaba has faced a lot of probes in the recent past. Executives of the company had to form a task force in order to deal with all the regulators on a daily basis. Recently, Shanghai Stock Exchange blocked the planned IPO of Jack Ma’s financial services company Ant Group. The company was returned to its origins of being a payment provider. It was told to shut down all other services. The company had started services like insurance and wealth management. After this order, Ma had briefly dropped out of the spotlight. People had started to question his whereabouts. Later he appeared briefly in a video for an initiative by his charity foundation.