Alibaba Hit with $2.8 Billion Fine by Chinese Regulators in An Anti-Monopoly Probe

Jack Ma CEO of Alibaba
Jack Ma CEO of Alibaba

Regulators in China have slapped Alibaba (NASDAQ: BABA) group with an 18.23 billion yuan ($2.8 billion) fine in an anti-monopoly investigation. Chinese regulators alleged the tech giant abusing the market dominance. The $2.8 billion accounts for 4% of Alibaba’s 2019 revenue.

In December, Chinese regulators started investigating the practices of Alibaba with merchants. Merchants argued with the regulators regarding being unable to use both platforms. Purposely the tech required users to choose one of the two Alibaba platforms.

State Administration for Market Regulation (SAMR) said in a statement on Saturday Alibaba’s merchants’ policy “infringes on the businesses of merchants on the platforms.” Additionally, the policy “infringes on the legitimate rights and interests of consumers,” according to a CNBC translation of a Chinese-language statement.

Chinese regulators’ cold war with Alibaba

Chinese government added the “choose one” policy Alibaba follows enabled the tech giant to override competitors. This provided the opportunity to take an unfair advantage over others in the market. Now, the group’s obligations include sending compliance reports to the SAMR for 3 years.