Alibaba Fined Billions of Dollars By China for Monopoly Abuses

Chinese regulators struck out at leading eCommerce company Alibaba with a record breaking fine of 18.2bn yuan (US$2.78bn) due to practices deemed to be an abuse of their dominant market position, according to state-run media.

Check Out These Resources

• Do you need a business bank account for your online business? Take a look at our review of the five best bank accounts for sellers, some of which are free with no minimum balance or deposits. ^[sponsored]
• Boost your social media engagement with Publer. Learn how you can save time writing engaging content faster with AI. ^[sponsored]
• Could your online business use capital for growth? Here is a primer on revenue-based loans, and how they work.

The Xinhua news agency announced that the state administration for market regulation had assessed the fine after concluding an investigation into Alibaba that began in December. The investigation and fine centred on Alibaba’s alleged practice of requiring its member merchants to sell exclusively on its platforms.

The size of the penalty was determined after regulators decided to fine Alibaba to the value of 4% of its 2019 sales, Xinhua said. In a statement from Alibaba they accepted the fine and promised to ensure compliance in the future.

This record breaking fine is 3 times higher than the previous record from the Chinese government which they issued to Qualcom back in 2015 which was for $975 million.

“We will further strengthen our focus on customer value creation and customer experience, as well as continuing to introduce measures to lower entry barriers and business costs of operating on our platforms,”

“We are committed to ensuring an operating environment for our merchants and partners that is more open, more equitable, more efficient and more inclusive in sharing the fruits of growth.”

Alibaba Statement

Alibaba and other leading Chinese tech companies have come under increasing pressure due to growing concerns over their influence in China and on the lives of consumers. Alibaba in particular has been under careful watch since October 2020. Alibaba co-founder, Jack Ma, criticised Chinese regulators for being behind the times after they expressed growing concern over the push into loans, wealth management and insurance by Alibaba’s financial arm, Ant Group.

This could have stemmed from China attempting to rein in runaway personal debt and chaotic lending. The issue stemming from Ant’s growing profile and influence and which could have been viewed as a challenge to China’s state-dominated financial sphere.