Alibaba Fined Billions of Dollars By China for Monopoly Abuses
Chinese regulators struck out at leading eCommerce company Alibaba with a record breaking fine of 18.2bn yuan (US$2.78bn) due to practices deemed to be an abuse of their dominant market position, according to state-run media.
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The Xinhua news agency announced that 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 its member merchants to sell exclusively on its platforms.
The size of the penalty was determined after regulators decided to fine Alibaba to the value of 4% of its 2019 sales, Xinhua said. In a statement from Alibaba they accepted the fine and promised to ensure compliance in the future.
This record breaking fine is 3 times higher than the previous record from the Chinese government which they issued to Qualcom back in 2015 which was for $975 million.
“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,”
“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.”
Alibaba Statement
Alibaba and other leading Chinese tech companies have come under increasing pressure due to growing concerns over their influence in China and on the lives of consumers. Alibaba in particular has been under careful watch since October 2020. Alibaba co-founder, Jack Ma, criticised Chinese regulators for 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.
This could have stemmed from China attempting to rein in runaway personal debt and chaotic lending. The issue stemming from Ant’s growing profile and influence and which could have been viewed as a challenge to China’s state-dominated financial sphere.
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Dave Furness
Dave is a Co-Founder of eSeller365. For over 10 years he has been involved with eCommerce with a particular interest in the marketplaces and the huge opportunities available for sellers when utilizing a multi-channel strategy. After a year of being the UK’s youngest eCommerce consultant, he built an education platform called UnderstandingE that showed the world how to utilize Magento as the “Third Generation of Multi-Channel software”.
Dave has also created a YouTube channel dedicated to entrepreneurship and eCommerce as well as a podcast dedicated to mental health awareness. When Dave isn’t working his main interests include learning and playing Chess, researching the Crypto and NFT space, and trying to find the nearest beach.