China said on Saturday that it was Fined a record $ 2.8 billion The government’s toughest action to date in its campaign to more closely regulate the country’s Internet giants, on the e-commerce titan Alibaba for monopolistic business practices.
Beijing market sentinel started Investigating Alibaba in December for possible antitrust violations, including preventing merchants from selling their merchandise on other shopping platforms. On Saturday, the regulator said its investigation concluded that Alibaba hindered competition in online retail in China, affecting innovation in the Internet economy and harming consumers’ interests.
The fines on Alibaba, one of China’s most valuable private companies and the base of the country’s most famous tycoon Jack Ma’s business empire. $ 975 million antitrust penalty The Chinese government imposed the US chip giant Qualcomm in 2015.
Chinese authorities on Saturday left little doubt about the signal they wanted to send to other Internet behemoths. In a commentary The fine was published online a minute after it was announced, People’s Daily, the official Communist Party newspaper, called the regulation “a type of love and care”.
“Monopoly is the great enemy of market economy,” the commentary read. “There is no contradiction between supporting regulation and development under the law. Rather, they complement each other and are mutually reinforcing. “
Fine Alibaba’s fate is unlikely to leave enough teeth. The state administration for the market regulation, the Chinese agency that imposed the penalty, said that the amount represents 4 percent of Alibaba’s domestic sales in 2019. The group reported profits of more than $ 12 billion in the last three months of 2020 alone.
The fact that Beijing has not demanded large additional concessions from Alibaba is a “good news for the firm” decision, said Angela Zhang, an associate professor and director for Chinese law at the University of Hong Kong.
Qualcomm, when it was fined six years ago, Also agree Offering huge discounts to Chinese customers on patent royalties. On Saturday, the market regulator merely stated that Alibaba is required to curb its antichromatic behavior and submit a report on its compliance for three years.
“I think the market should react positively,” Professor Zhang said, although he cautioned that the government could always conduct additional investigations into other aspects of Alibaba’s business.
In a statement, Alibaba said it would “with sincerity” accept the punishment and strengthen internal systems “to better fulfill our responsibility to society.”
“The fine issued today has been given to alert and catalyze companies like ours,” Alibaba said. “This reflects the thoughtful and authentic expectations of regulators towards the development of our industry.”
In the past decade, Alibaba’s business has expanded beyond logistics, grocery, entertainment, social media, travel booking and other things. Like its partner Internet, Alibaba has stated that the breadth of its business helps make each of its services more useful. But critics say the company’s size is a playground for competitors and limits consumers’ choice.
China launched an investigation into its tech giants last year. Market regulator Proposed update The country’s antimonopoly law with a new provision for large Internet platforms such as Alibaba. In November, officials halted plans for Alibaba’s sister company, the finance-focused Ant Group Going public And strict monitoring of Internet finance.
In December, it opened an antimonopoly investigation into Alibaba – a shocking twist for Mr Ma, who was held by people in China as a symbol of long-term entrepreneurial pluck.
There is also growing skepticism about the dominance of large Internet companies in the United States and Europe. Western regulators have Repeatedly fined Goliath like Google in recent years for various anti-infringements. but Such punishment The nature of companies’ businesses generally has not changed enough to alleviate concerns about their power.
China began later than the West to closely monitor Big Tech. But its efforts are already beginning to affect the way Chinese Internet giants work, a reflection of how all private companies in China need to be in good government grip in order to survive.
For many years, Alibaba and its archery, gaming and social media giant Tencent, have competed ferociously in many businesses, including preventing their own users from spending time on other company’s services. It can begin to change. In a first for the company, Alibaba recently applied for two of its commerce platforms, Taobao Deals and Jianyu, which is present on WeChat, Tencent’s ubiquitous social app.