Chinese regulators have accused Alibaba of abusing its dominant position in the e-commerce market to stifle competition.
Chinese e-commerce giant Alibaba was fined 18.2 billion yuan [$2.78 billion, €2.3 billion] by regulators on Saturday for violating anti-monopoly rules, state-run media reported.
The State Administration for Market Competition [SAMR] said the company was “abusing its dominant position” to squash rival online retailers.
What is Alibaba accused of?
Regulators opened the investigation into Alibaba in December 2020.
The company is accused of “hindering the free circulation” of goods by forbidding merchants on its popular platforms from using the sites of e-commerce competitors.
The practice is a long-standing one, and the Chinese regulator spelled out in rules issued in February that it was illegal.
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The fine was calculated by taking 4% of the company’s total 2019 sales of 455.712 billion yuan [$69.5 billion, €58.4 billion].
The company will also have to file self-examination and compliance reports to the SAMR for the next few years.
How has Alibaba reacted to the penalty?
The company said it will accept the fine in a statement. The penalty is a major blow to Alibaba co-founder Jack Ma, one of China’s wealthiest men.
In October, Ma gave a speech criticizing Chinese financial regulators for hurting innovation in the country.
In the following month, Jack Ma met with regulators to discuss the company’s heavily-scrutinized fintech branch, Ant Group, with the Shanghai Stock Exchange then suspending its initial public offering.