China on Saturday issued a record antitrust fine of nearly $2.8 billion on e-commerce giant Alibaba, the latest in Beijing’s ongoing efforts to clamp down on tech companies.
China’s State Administration for Market Regulation (SAMR) said that it determined following the completion of an investigation launched in December that Alibaba’s “exclusive dealing agreements” have limited the sale of products on rival online platforms, according to CNN.
The fine, which is about 4 percent of Alibaba’s total domestic revenue for 2019, comes after Alibaba’s founder Jack Ma criticized China’s regulatory system in October, prompting scrutiny of the company.
In November, Chinese authorities foiled a planned $37 billion IPO by Ant Group, Alibaba’s internet finance arm. The public offering was set to be the world’s biggest ever, Reuters reported.
Hong Hao, head of research BOCOM International in Hong Kong, told Reuters on Saturday, “This penalty will be viewed as a closure to the anti-monopoly case for now by the market,” adding that it is “indeed the highest profile anti-monopoly case in China.”
“The market has been anticipating some sort of penalty for some time … but people need to pay attention to the measures beyond the anti-monopoly investigation,” Hao added.
In addition to the fine, the SAMR also ordered Alibaba to make “thorough rectifications” to better comply with regulations and protect consumer rights, according to Reuters.
In response, Alibaba CEO Daniel Zhang sent in a memo to staff obtained by Reuters that the company “will tackle” the penalty “openly and work through it together.”
“Let’s improve ourselves and start again together as one,” he added.
In October, the Cyberspace Administration of China (CAC) announced plans for a complete “rectification” of Chinese mobile internet browsers in order to address what the group at the time claimed was an online “gathering place” of “chaos.”
“For some time, mobile browsers have grown in an uncivilised way … and have become a gathering place and amplifier for dissemination of chaos by ‘self-media’,” CAC said at the time, adding that mobile browsers that had “outstanding problems” after the “rectification” will “be dealt with strictly according to laws and regulations until related businesses are banned.”