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Record Alibaba Fine Shows China’s Big Tech Can’t Fight Back - Yahoo Finance

Record Alibaba Fine Shows China’s Big Tech Can’t Fight Back - Yahoo Finance

Record Alibaba Fine Shows China’s Big Tech Can’t Fight Back - Yahoo Finance
Apr 11, 2021 1 min, 36 secs

(Bloomberg) -- After China imposed a record antitrust fine on Alibaba Group Holding Ltd., the e-commerce giant did an unusual thing: It thanked regulators.

For Alibaba, the $2.8 billion fine was less severe than many feared and helps lift a cloud of uncertainty hanging over founder Jack Ma’s internet empire.

The 18.2 billion yuan penalty was based on just 4% of the internet giant’s 2019 domestic revenue, regulators said.

The fine came with a plethora of “rectifications” that Alibaba will have to put in place -- such as curtailing the practice of forcing merchants to choose between Alibaba or a competing platform -- many of which the company had already pledged to establish.

Read more: China Fines Alibaba Record $2.8 Billion After Monopoly Probe.

China’s record fine on Alibaba may lift the regulatory overhang that has weighed on the company since the start of an anti-monopoly probe in late December.

The 18.2 billion yuan ($2.8 billion) fine, to penalize the anti-competitive practice of merchant exclusivity, is equivalent to 4% of Alibaba’s 2019 domestic sales.

The investigation into Alibaba was one of the opening salvos in a campaign seemingly designed to curb the power of China’s internet leaders, which kicked off after Ma infamously rebuked “pawn shop” Chinese lenders, regulators who don’t get the internet, and the “old men” of the global banking community.

Regulators are said, for instance, to be concerned about Alibaba’s ability to sway public discourse and want the company to sell some of its media assets, including the South China Morning Post, Hong Kong’s leading English-language newspaper.

Read more: China Presses Alibaba to Sell Media Assets, Including SCMP.

“The high fine puts the regulator in the media spotlight and sends a strong signal to the tech sector that such types of exclusionary conduct will no longer be tolerated,” said Angela Zhang, author of “Chinese Antitrust Exceptionalism” and director of the Centre for Chinese Law at the University of Hong Kong.

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