China regulators have fined e-commerce giant Alibaba $ 2.78 billion for practices intended to abuse the company’s dominant position, state media reported on Saturday.
The Xinhua News Agency said the country’s market regulators estimated the fine after closing an investigation at Alibaba that opened in December.
The investigation and fines focus on Alibaba’s alleged practice of obliging retailers. They are wishing to sell their goods on their popular platform to do so simply to avoid competing e-commerce sites.
The fines are an attempt by the government to strengthen antitrust laws and prevent companies from harassing. However, that doesn’t mean the government denies the important role online platform companies play.
The People’s Daily reported in an article published shortly after the fines publish.
Alibaba and other leading Chinese tech firms are under growing concern over their influence in China. Where tech-savvy users use leading platforms to communicate, shop, pay bills, order taxis, rent and perform various other daily tasks.
Ma, one of China’s richest and most famous businessmen disappeared from the public eye after criticizing regulators in a speech in November.
The Ant Group suspended days later, although financial experts said regulators already concern that Ant lacked adequate financial risk controls.
In February, the government issued antitrust guidelines aimed at preventing anti-competitive practices.
The practices include such as signing exclusive agreements with dealers and using subsidies to drive competitors out.
Founded in 1999, Alibaba operates a retail, business-to-business, and consumer-to-consumer platform. The company has grown rapidly in financial services, film production and other fields.
Jack Ma’s Concerns
Its co-founder, Jack Ma, criticized Chinese regulators for their guarantees after raising concerns about credit, asset management and insurance pressure from Alibaba’s financial division, Ant Group.
According to Shi, the decision to penalize 4 percent of Alibaba’s domestic sales in 2019 was moderate. The reason is that it shows the government’s legal principles and stance to strengthen antitrust laws.
But also guidelines to support online platform development. The law specify that companies will be fined 1 to 10 percent of their annual sales in the previous year if they abuse market domination.
China is trying to control loose personal debt and chaotic credit. The growing profile of the ant – and Ma’s rare public criticism – see as a challenge to China’s state-dominated financial sector.