Alibaba hit with record $2.75bn anti-monopoly fine

The Chinese government has levied a record $2.75 billion fine on Alibaba following allegations of monopolistic practices, almost triple the $975 million chip manufacturer Qualcomm had to pay Chinese regulators in 2015.

Alibaba, currently valued at around $608 billion, controls a significant portion of the Chinese domestic e-commerce and cloud computing markets.

The fine represents around 4 per cent of the tech giant’s domestic revenue.

Alibaba will also be forced to introduce new rules to lower barriers to entry and reduce the business costs faced by sellers on its platforms.

The regulators accused Alibaba of restricting merchants from selling on rival platforms.

The fine comes as China is putting increased scrutiny on its domestic technology companies, including stopping a planned $37 billion initial public offering by Ant Group, Alibaba’s internet finance division.

Premier of the State Council of the People's Republic of China Li Keqiang recently made a statement at the National People’s Congress about stamping out monopolies and preventing the “unregulated” expansion of capital.

China's State Administration for Market Regulation (SAMR) said it had fined 12 companies over 10 deals for alleged monopolistic practices.

Shares in Alibaba rose around 9 per cent in Hong Kong trading in response to the reduction in uncertainty about what the actions of the Chinese regulator would be.

Daniel Zhang, chief executive at Alibaba, said they did not expect any “material impact” from the regulator's actions.

"We're happy to get the matter behind us, but the tendency is that regulators will be keen to look at some of the areas where you might have unfair competition," he said.

    Share Story:

Recent Stories


The Future of Intelligent Finance
FStech Group Editor Mark Evans sits down with Jason Cao, President of Global Financial Services Business Unit, Enterprise BG at Huawei ahead of its Intelligent Finance Summit which was held on 3rd and 4th of June in Shanghai. This Q&A delves into key trends in digital transformation of the financial services industry as well as a look at how data, robotic infrastructure, intelligent storage and innovative technologies are shaping the future for FSIs.

The Rise of Instant Payments
Instant payments are creating new business opportunities for banks by providing more touchpoints than ever. With these evolutions underway, Featurespace brought leading industry experts together to discuss how they are protecting customers from fraudsters in real time, utilizing innovative and disruptive solutions to reduce fraud. Click here to find out more.

Offloading Cyber Risk in the Cloud
As cyber attacks and data breaches are in the news on an increasingly regular basis - with regulatory penalties and customer trust on the line for financial services firms - it has never been more crucial to be compliant in the cloud.

This video, with Akamai’s EMEA director of security technology and strategy Richard Meeus, will help explain what your company can be doing to make sure it’s not embroiled in the next big fine or front-page scandal.