Jack Ma has hit a record again. Alibaba fined $2.8 billion by Chinese regulators amid regulatory scrutiny on business empire. China’s State Administration for Market Regulation has levied a fine of a whopping $2.8 billion against Alibaba Group Holding Ltd. for mistreating its dominant position over rivals and merchants on its e-commerce platforms.
The antitrust regulator said that Alibaba was punishing a few merchants for selling their goods on both Alibaba and on rival platforms. The regulators also said that Ali Baba has been violating anti-monopoly rules and exploiting merchants for its personal gain.
Alibaba’s negative effect on businesses
Considered the highest ever anti-trust fine to be imposed in China, the government said the retail giant stifled competition. It was during an investigation initiated in December last year that it was found that the company’s practices had a negative effect on online retail competition and innovation.
Alibaba, in an official statement, accepted the fine and vowed to make improvements to better serve its “responsibility to society.” The statement said, “We will further strengthen our focus on customer value creation and customer experience, as well as continuing to introduce measures to lower entry barriers and business costs of operating on our platforms.” It further added, “We are committed to ensuring an operating environment for our merchants and partners that is more open, more equitable, more efficient, and more inclusive in sharing the fruits of growth.”
The regulatory authority has demanded the e-commerce giant to carry out an inclusive revamp of its operations and to submit a “self-examination compliance report”. Alibaba is now likely to be much more cautious about doing anything that resembles strong-arming users or rivals.
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In the last few months, the anti-trust authority has imposed smaller fines on companies failing to report acquisition deals in advance. The Chinese authorities do not want to tighten control over internet giants in a way that would undermine the country in its strategic rivalry with other global powers.
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