Alibaba Hit with $2.78B Anti-Trust Penalty by China’s Market Regulator

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Jack Ma’s Alibaba has been slapped with a massive fine by China’s market regulator following the launch of an anti-trust investigation into the e-commerce giant at the end of December.

The State Administration for Market Regulation (SAMR) announced on 10 April that it had found that Alibaba had engaged in conduct in breach of articles 47 and 49 of China’s Anti-trust Law, concerning abuse of market allocation power by “restricting parties to transactions to only engaging in transactions with [a given platform] without proper reason.”

SAMR ordered Alibaba to cease such conduct, as well as applied a penalty of 4% of Alibaba’s 2019 domestic sale volume of 455.712 billion yuan, being 18.228 billion yuan (approx. USD$2.78 billion).

Alibaba is now required to “strictly implement its duties as a platform enterprise actor, strengthen internal controls and compliance regulation, maintain fair competition, and protect the lawful rights and interests of vendors and consumers,” as well as submit annual reports on compliance self-inspections to SAMR for the next three years.

SAMR launched its anti-trust investigation into Alibaba on 24 December, in response to allegations of monopolistic conduct that involved exclusive agreements with vendors.

The Chinese market authority further stepped up regulation of online trust activity with the issuance of the “State Council Anti-trust Committee Anti-trust Guidelines for the Platform Economy Sphere” (国务院反垄断委员会关于平台经济领域的反垄断指南) on 7 February 2021, which focused in particular upon exclusive agreements for vendors and the use of big data to provide differentiated pricing to customers.

Chinese regulators have put heavy pressure on Alibaba-founder Jack Ma and his online e-commerce and fintech empire since late 2020, scuppering the listing of his digital payments platform Ant Group that was originally scheduled for the start of November.

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