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Alibaba accepts record fine imposed by China’s anti-monopoly regulator

Alibaba accepts record fine imposed by China’s anti-monopoly regulator
Alibaba accepts record fine imposed by China’s anti-monopoly regulator

Chinese technology company, Alibaba, has reportedly accepted a record fine of $2.8 billion, imposed on it by the anti-monopoly regulator of the country. The imposition comes after a probe that determined that the company had abused its position in the market for years. The penalty amounts to nearly 4 per cent of the 2019 domestic revenue of the company.

As per sources close to the matter, the key issue for regulators was that Alibaba restricted merchants from running promotions or doing business on rival platforms. The company stated that it would introduce measures for the reduction of business costs and entry barriers that merchants face on e-commerce platforms.

According to Joe Tsai, the Executive Vice Chairman of Alibaba Group, with this penalty decision, the company has got good guidance on some of the specific issues under the anti-monopoly law. The group does not anticipate any material effect on its business from the change of exclusivity arrangements that have been imposed by regulators.

Tsai also stated that regulatory authorities have taken an interest in platforms such as Alibaba as they grow in significance. He told in an investor call on Monday, 12th April 2021, that the company is happy to get the matter behind it, but the tendency is that authorities will be keen for looking at some of the areas where the competition might be unfair.

Alibaba Group added that it was unaware of any upcoming anti-monopoly investigations by the country’s regulators. However, it signaled that Alibaba and its rivals would stay under review in China over acquisitions and mergers.

Further, according to Alibaba, it might be the biggest and the first Chinese technology company for attracting the attention of regulators. But the company is by no means the last.

The technology giant indicated that while for now, Alibaba Group is in the clear as far as future investigations are concerned, the same could not be stated for other companies in this sector.

Source credit: https://www.bbc.com/news/business-56713508

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Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for newsorigins.com, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.