SHANGHAI – Chinese regulators have hit e-commerce giant Alibaba with a massive 18.2 billion yuan (RM11.5 billion) fine over practices deemed to be an abuse of the company’s dominant market position, state-run media reported today.
Xinhua news agency said the State Administration for Market Regulation had assessed the fine after concluding an investigation into Alibaba that began in December.
The investigation and fine centred on Alibaba’s alleged practice of requiring that merchants who wish to sell their wares on its popular platforms do so exclusively, avoiding rival e-commerce sites.
“Since 2015, Alibaba Group has abused its dominant position in the market” to gain an unfair advantage via the exclusivity requirement, the regulator said.
Such behaviour restricted competition and innovation in the sector and violated the rights and interests of businesses and consumers, it added.
The fine was a record and nearly three times the almost US$1 billion levied against Qualcomm in 2015, Bloomberg said.
The size of the penalty was determined after the watchdog – which monitors market competition and guards against monopolistic behaviour – decided to fine Alibaba 4% of its 2019 sales of 455.7 billion yuan, Xinhua said.
Alibaba issued a brief statement on an official social media account saying: “We sincerely accept this punishment and will firmly comply.”
It also pledged to bring its operations in line with regulations, build a compliance system “and better fulfil our social responsibilities”.
Alibaba and other leading Chinese tech companies have come under pressure amid growing concern over their influence in China, where tech-savvy consumers use leading platforms to communicate, shop, pay bills, book taxis, take out loans and perform a range of other daily tasks.
Alibaba, in particular, has been under scrutiny since last October, when co-founder Jack Ma criticised Chinese regulators as being behind the times after they expressed growing concern over the push into loans, wealth management and insurance by Alibaba’s financial arm, Ant Group.
China has been seeking to rein in runaway personal debt and chaotic lending, and upstart Ant’s growing profile – and Ma’s rare public criticisms – have been viewed as a challenge to China’s state-dominated financial sphere. – AFP, April 10, 2021
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