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Sunday, 21 July 2024
China hits Alibaba with $2.78 bln fine over market abuses: State media
The logo of Alibaba Group is seen at the company's headquarters in Hangzhou, China. (File photo: Reuters)

Chinese regulators have hit e-commerce giant Alibaba with a massive 18.2 billion yuan ($2.78 billion) fine over practices deemed to be an abuse of the company’s dominant market position, state-run media reported on Saturday.

Xinhua news agency said the State Administration for Market Regulation had assessed the fine after concluding an investigation into Alibaba that began in December.

Party leaders worry about the dominance of China’s biggest internet companies including Alibaba at a time when the industry is expanding into finance, health services and other sensitive areas. The party says anti-monopoly enforcement, especially in tech industries, is a priority this year.

Alibaba was fined for “abusing its dominant position” to limit competition by retailers that use its platforms and hindering the “free circulation” of goods, the State Administration for Market Regulation announced. It said the fine was equal to 4 percent of its total 2019 sales of 455.712 billion yuan ($69.5 billion).

The move is a new setback for Alibaba and its billionaire founder, Jack Ma, following a November decision by regulators to suspend the stock market debut of Ant Group, a finance platform spun off from the e-commerce giant. It would have been the world’s biggest initial public stock offering last year.

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.

Alibaba, launched in 1999, operates retail, business-to-business and consumer-to-consumer platforms. It has expanded at a breakneck pace into financial services, film production and other fields.

source: Agencies

Image source: Reuters