China’s General State Administration for Market Control and Regulation has fined Alibaba 18.34 billion yuan ($ 2.78 billion) for antitrust violations.
“Following Articles 47 and 48 of the Anti-Monopoly Law and taking into account the nature, duration and extent of the illegal activities of the Alibaba Group, China’s General Directorate of Market Control and Regulation issued an administrative penalty on April 10, 2021, deciding to impose a fine of 4% of the company’s 2019 domestic sales of 455.712 billion yuan, for a total of 18.228 billion yuan, “- said in a statement published on the regulator’s website.
Since 2015, authorities say Alibaba has abused its dominant market position by forcing companies that trade on its platform to abide by the so-called “er Xuan Yi” (“choose only one of the two”) principles. That is, it forbade them to open stores or participate in promotions on other competing platforms.
“The company used market forces, platform rules and data, algorithms and other technical means, adopted various incentives and punishments to enforce the Er Xuan Yi principle, maintain and enhance its market power and gain unfair competitive advantages.” said in a statement from the regulator.
In addition to the fine, the agency demanded that the company strengthen internal control and compliance with regulatory requirements. Alibaba was obliged to maintain fair competition and report to the authorities for three years.
Alibaba itself, commenting on the decision of the regulator, said that they “fully accept” the punishment and are ready to “completely obey.” “We will strengthen our business following the law, strengthen the construction of a system of compliance with regulatory requirements and will better fulfil our social obligations,” the company said.
Alibaba’s antitrust investigation began in late 2020. The company expressed its willingness to actively cooperate with the authorities and conduct normal business despite the investigation.
Previously, the largest fine in China’s history, a $ 975 million fine, was paid in 2015 by Qualcomm, accused of unfair competition.
Alibaba Group is the largest internet company in China with an e-commerce business since 1999. The group also owns the online platforms Alibaba Pictures, AliExpress, Taobao, Tmall.