Technology
After an antitrust investigation, China fines Alibaba $2.8 billion.
According to The New York Times, China has fined Alibaba, one of the country's largest online retailers, a record $2.8 billion after an inquiry found the ecommerce giant had violated China's anti-monopoly rule. The fine, which is equal to 4% of Alibaba's domestic revenue in 2019, is three times higher than the $975 million fine China levied on Qualcomm in 2015.
In December, the Chinese government initiated an investigation into Alibaba to see if it was blocking merchants from selling their goods on other sites. Alibaba's activities had a negative impact on online retail competition and innovation, according to China's market regulator.
According to China's State Administration for Market Regulation, Alibaba used data and algorithms to improve its own position in the marketplace, resulting in a "improper competitive advantage." For the next three years, the organization must reduce its anticompetitive tactics and submit enforcement reports to the government.
Alibaba said in a statement that it acknowledged the fine and promised to reform to better serve its "social obligation."
The company's statement reads, We will continue to implement steps to lower entry barriers and business costs of operating on our networks, as well as strengthening our emphasis on consumer value development and customer experience.
We are dedicated to providing a more transparent, fair, effective, and inclusive operating atmosphere for our merchants and partners in sharing the benefits of growth.
The hefty fine is unlikely to have a significant impact on Alibaba's bottom line; in February, the company announced a $12 billion third-quarter profit — for the final three months of calendar year 2020 alone.
An earlier version of this story included an erroneous amount for Qualcomm's fine levied by China. The sum was $975 million. We apologize for the oversight.
