China has ordered Alibaba to pay a record fine of 18. 2 billion yuan ($2. 8 billion) after antitrust regulators concluded that the online shopping giant had been behaving like a monopoly.
Chinese state media reported Saturday that the State Administration for Market Regulation had imposed the penalty following an antitrust investigation into Alibaba’s (BABA) “exclusive dealing agreements” that prevented merchants from selling products on rival e-commerce platforms — a practice known as “choosing one from two. “
Last month, Xi urged officials to step up their efforts to regulate online companies to maintain social stability.
By making such a high-profile example, Chinese regulators are sending a clear message about their intent to rein in the country’s most powerful companies.
Ma has kept a very low profile since Ant Group, Alibaba’s financial affiliate, was forced to shelve what would have been the world’s biggest IPO last November after he criticized Chinese regulators.
Beijing has long been concerned that the influence tech firms have over the financial sector makes that industry vulnerable — Ant, for example, now commands more than half of the mobile payments market in China — and officials have been looking for ways to rein them in.
Regulators have questioned executives at Tencent (TCEHY) and Pinduoduo (PDD), punished TikTok-owner Bytedance and Baidu (BIDU) with fines for alleged monopolistic behaviors in corporate acquisitions, and floated new rules that could govern the operations at many tech firms.
The company, which dominates online payments in China via WeChat Pay and owns hugely popular mobile games, said in a statement last month that a recent meeting with regulators was “voluntary. “
