Alibaba might be issued with the largest fine in Chinese history

Alibaba might be issued with the largest fine in Chinese history
Source: 11.03.2021 133

According to the Wall Street Journal's sources, Chinese antitrust regulators plan to fine Alibaba the largest amount in China's corporate history. It clarifies that it is likely to exceed $ 975 million, which Qualcomm paid in 2015. Furthermore, the company will be required to abandon the practice of "choose one of two", where the seller is pressured to either sell exclusively through one platform or be banned from it.

At the end of 2020, the State Administration for Market Regulation launched an antitrust investigation against Alibaba. The company expressed its readiness to cooperate with the authorities actively and promised that it would continue to conduct normal activities despite the investigation.

Alibaba Group is the largest internet company in China with an e-commerce business since 1999. The group also owns the online platforms Alibaba Pictures, AliExpress, Taobao, Tmall. Under founder Jack Ma, Alibaba Group Holding Ltd. grew into a Chinese version of Amazon. Chinese President Xi Jinping's recent crackdown on the empire of China's best-known entrepreneur has put an end to that. Countless government meetings have been devoted to incorporating the new methods and practices for preventing big tech firms from monopolizing the market and engaging in anticompetitive behaviour.

According to the Wall Street Journal's sources, China's authorities do not want to cripple the company despite the recent crackdown on the tech giant. With more than 110,000 employees, Alibaba features a fast-expanding artificial-intelligence business and is a leading Chinese cloud storage provider—sectors seen as key to China's future economy. They don't want to risk dulling the innovation and competitive spirit that powered China's growth in recent decades. At the opening last week of China's annual legislative session, Premier Li Keqiang declared that "the state supports platform companies' innovation and development."

Neither Alibaba nor the SAMR has issued any comment.

The solution and the consequences of the Alibaba case are still unclear and can only be speculated about. However, there is a potential for this case to become an example of the state dealing with tech giants and disrupting their anticompetitive behaviour to some extent - instead of imposing yet another seemingly huge but realistically insignificant fine, without disrupting the economy.

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