Alibaba Group, one of the biggest online commerce companies in China, has been fined a record-breaking $2.75 billion by Chinese regulators. The company was fined for violating anti-monopoly rules and abusing its dominant position in the market.
The fine is the highest ever to be imposed in the country, though it only makes up approximately 4% of Alibaba’s revenues in 2019. The penalty comes at a time amid unprecedented regulatory crackdowns against similar companies in the last few months that have been weighing down on company shares.
Jack Ma, the billionaire founder of the Alibaba Group, now has his business empire under heavy scrutiny following his criticism of China’s regulatory system in late October.
Back in December last year, China’s State Administration for Market Regulation (SAMR) announced an antitrust campaign against the company. The news came after Chinese authorities put a stop to a planned $37 billion IPO (Initial Public Offering) from Ant Group, Alibaba’s internet finance arm.
After its investigation, SAMR discovered that the Alibaba Group had been “abusing market dominance” since 2015. The company had been preventing its merchants from using other e-commerce platforms.
These practices were in violation of China’s anti-monopoly law and the company was ordered to make “thorough rectifications” to ensure compliance with these laws and to protect consumer rights.
Alibaba posted an official statement on Weibo saying that it accepted the decision and would immediately work on implementing SAMR’s rulings.