China has hit Alibaba, one of the country’s largest online retailers, with a record fine of $ 2.8 billion (18.2 billion yuan) after investigations found the e-commerce giant violated China’s antimonopoly law. The New York Times reported. The fine, which represents 4 percent of Alibaba’s domestic sales in 2019, is three times the $ 975 billion fine that China imposed on US chip company Qualcomm in 2015.
The Chinese government launched an investigation into Alibaba in December to determine whether the company was preventing merchants from selling their products on other platforms. The Chinese market regulator found that Alibaba’s practices had a negative effect on online retail competition and innovation. Alibaba used data and algorithms to strengthen its own position in the market, resulting in an “inappropriate competitive advantage,” said China’s state market regulation administration said in a statementThe company will have to cut back on anti-competitive tactics and provide compliance reports to the government for the next three years.
Alibaba said in a statement it accepted the fine and promised to make improvements to better serve its ‘responsibility to society’.
“We will further strengthen our focus on creating customer value and customer experience, as well as continuing to implement measures to lower barriers to entry and operating costs for operating on our platforms,” the company said. “We are committed to creating a work environment for our merchants and partners that is more open, equitable, efficient and inclusive in sharing the fruits of growth.”
However, the hefty fine will not harm Alibaba too seriously; in February, the company reported a profit in the third quarter – for the last three months of calendar year 2020 alone – from $ 12 billion.