China Fines Alibaba $2.8 Billion For Anti-Competitive Tactics

Alibaba Group, the world’s biggest e-commerce company, was fined
18.3 billion yuan ($2.8 billion) by Chinese regulators on Saturday
for anti-competitive tactics, as the ruling Communist Party
tightens control over fast-growing tech industries.

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

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

“Alibaba accepts the penalty with sincerity and will ensure its
compliance with determination,” the company said in a statement. It
promised to “operate in accordance with the law with utmost
diligence.”

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.

The government issued anti-monopoly guidelines in February aimed
at preventing anti-competitive practices such as exclusive
agreements with merchants and use of subsidies to squeeze out
competitors.

The next month, 12 companies including Tencent Holdings, which
operates games and the popular WeChat messaging service, were fined
500,000 ($77,000) each on charges of failing to disclose previous
acquisitions and other deals.

Regulators said in December they were looking into possibly
anti-competitive tactics by Alibaba including a policy dubbed
“choose one of two,” which requires business partners to avoid
dealing with its competitors.

Also in December, regulators announced executives of Alibaba,
its main competitor, JD.com, and four other internet companies were
summoned to a meeting and warned not to use their market dominance
to keep out new competitors.

Alibaba Group, the world’s biggest e-commerce company, was fined
18.3 billion yuan ($2.8 billion) by Chinese regulators on Saturday
for anti-competitive tactics, as the ruling Communist Party
tightens control over fast-growing tech industries.

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

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

“Alibaba accepts the penalty with sincerity and will ensure its
compliance with determination,” the company said in a statement. It
promised to “operate in accordance with the law with utmost
diligence.”

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.

The government issued anti-monopoly guidelines in February aimed
at preventing anti-competitive practices such as exclusive
agreements with merchants and use of subsidies to squeeze out
competitors.

The next month, 12 companies including Tencent Holdings, which
operates games and the popular WeChat messaging service, were fined
500,000 ($77,000) each on charges of failing to disclose previous
acquisitions and other deals.

Regulators said in December they were looking into possibly
anti-competitive tactics by Alibaba including a policy dubbed
“choose one of two,” which requires business partners to avoid
dealing with its competitors.

Also in December, regulators announced executives of Alibaba,
its main competitor, JD.com, and four other internet companies were
summoned to a meeting and warned not to use their market dominance
to keep out new competitors.