China on Saturday said it was imposing a record $ 2.8 billion fine on e-commerce giant Alibaba for its monopolistic business operations, the government’s toughest action for Up to now in the campaign to control the country’s internet giants more closely.
Beijing’s market watchdog began investigating Alibaba in December for potential antitrust violations, including preventing merchants from selling their goods on other shopping platforms. . On Saturday, the regulator said its investigation concluded that Alibaba was hindering competition in the online retail sector in China, affecting innovation in the internet economy and hurting harm to the interests of consumers.
The fine on Alibaba, one of China’s most valuable private companies, exceeds the $ 975 million antitrust fine that the Chinese government has imposed on Qualcomm, the US chip giant. , in 2015. Even so, it is unlikely to leave a significant trace on Alibaba’s destiny. The regulator said the fine represents 4% of Alibaba’s domestic sales in 2019. The group reported a profit of more than $ 12 billion in the last three months of 2020 alone.
Alibaba said in a statement that it will accept the punishment “sincerely” and will strengthen its internal system “to better fulfill its social responsibilities.”
Over the past decade, Alibaba’s business has gone beyond shopping, into logistics, grocery, entertainment, social media, travel booking, and more. Like the internet giants, Alibaba has said that the breadth of its business helps make each of its services more useful. But critics say the size of the company reduces the playing field for competitors and limits consumer choice.
China began increasing scrutiny of its tech giants last year. The market regulator proposed to update the country’s antitrust law with a new provision for major internet platforms like Alibaba’s. In November, officials halted the plans of Alibaba’s sister company Ant Group to focus on finance, to go public and tighten internet financial scrutiny.
In December, it opened an antitrust investigation against Alibaba – a staggering twist to the fortunes of Alibaba co-founder Jack Ma, whom everyone in China has long regarded as the symbol of success in business.
Skepticism of the influence of major internet companies is also on the rise in the United States and Europe. Western regulators have repeatedly fined Goliaths like Google in recent years for various antitrust violations. But such penalties generally do not change the nature of companies’ businesses enough to alleviate concerns about their power.