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After completing an antitrust probe into suspected monopolistic activities, Chinese regulators slapped Alibaba with a $2.8 billion fine. In December, the State Administration for Market Regulation initiated an investigation into the e-commerce giant’s “suspected monopolistic conduct” namely its strategy that requires vendors to sell solely on its platforms and forbids them from selling on competing e-commerce websites. According to a press release on the watchdog’s website, the regulation eliminated and limited competitiveness in the country and hampered progress in the online shopping portal market.
As a result of that determination, the regulator sanctioned the company in compliance with China’s antimonopoly regulation, requiring it to cease its illicit activities and pay a fine equal to 4% of its domestic revenue in the region. According to The New York Times, the $2.8 billion fine would not jeopardise Alibaba’s revenues, however it tops the $975 million penalty levied on Qualcomm by the Chinese government in 2015 for infringing antimonopoly laws. Alibaba said in a statement to the New York Times that it would recognise the punishment and would work to “to better carry out its social responsibilities.”
Last year, China began to hold a closer watch on software behemoths, with lawmakers introducing an amendment to the antimonopoly legislation that included new guidelines for them. After calling Chinese banks “state-owned pawnshops” for making needless loans at a finance summit, Jack Ma’s companies seem to have become a priority in his home country. To negotiate with regulators on a regular basis, his executives had to form a task force.
Aside from the antitrust investigation into Alibaba, the Shanghai Stock Exchange barred Ant Group, the financial services firm he established, from going public in November. By the end of the fiscal year, regulators directed the firm to “return to its origins” as a payment processor and to discontinue the savings, leasing, insurance, and wealth management programmes it had added over the years.