China: Alibaba have to pay fine of $2.75 billion for anti-monopoly violation
New Delhi: China’s market regulator ‘State Administration for Market Regulation’ (SAMR) levied a fine of 18 billion yuan ($2.75 billion) on Jack Ma-owned Alibaba, an e-commerce platform, for alleged violation of anti-monopoly rules and abuse of its dominant market position.
Besides the heavy fine — which is around 4 percent of its revenues in 2019 — SAMR has also asked Alibaba will have to file self-examination and compliance reports for the next three years.
In an official statement on Thursday (April 8), SAMR said that Alibaba flouted rules by forcing merchants on its website to sign exclusive cooperation agreements. This, SAMR says, prevents the merchants from selling products on Alibaba’s rival platforms.
Shortly after SAMR’s punitive action, Alibaba, in a statement posted on its official Weibo account, said that it accepts the penalty and will comply with the norms.
Meanwhile, Beijing authorities also halted new enrolments at an elite business school — Hupan University — backed by Alibaba founder Jack Ma, according to a Financial Times report.
While no clear reason has been stated behind the move, the report suggests that it is a part of the vendetta actions being taken against Jack Ma for his remarks critical of the country’s finance system. In October last year, Ma had slammed the country’s financial regulator saying China’s financial system was “the legacy of the Industrial Age” and that Chinese banks are giving loans to companies “that do not need money”.
In less than a month after Ma’s remark, the Chinese officials had suspended Ant’s IPO rollout, which was to be the highest valued public listing ever, in November 2020. Ant, the fintech arm of Alibaba, was expecting to raise $37 billion from the market. Back then, the company had said that the listing was suspended a “significant change” has been made in the regulations related to online lending.