China fines Alibaba record $2.75 billion for anti-monopoly violations

Chinese regulators have fined Alibaba Group Holding Ltd 18 billion yuan ($2.75 billion) for violating anti-monopoly rules and abusing its dominant market position, marking the highest ever antitrust fine to be imposed in the country, Reuters reports.

The penalty, equivalent to around 4% of Alibaba’s 2019 revenues, comes amid an unprecedented regulatory crackdown on home-grown technology conglomerates in the past few months that have weighed on company shares.

Alibaba’s billionaire founder Jack Ma’s business empire has been particularly put under intense scrutiny after his stinging criticism of China’s regulatory system in late October.

In late December, China’s State Administration for Market Regulation (SAMR) announced it launched an antitrust probe into the company. That came after authorities scuttled a planned $37 billion IPO from Ant Group, Alibaba’s internet finance arm.

While the fine brings Alibaba a step closer to resolving its antitrust woes, Ant still needs to agree to a regulatory-driven revamp that is expected to sharply cut its valuations and rein in some of its freewheeling businesses.

“This penalty will be viewed as a closure to the anti-monopoly case for now by the market. It’s indeed the highest profile anti-monopoly case in China,” said Hong Hao, head of research BOCOM International in Hong Kong.

“The market has been anticipating some sort of penalty for some time ... but people need to pay attention to the measures beyond the anti-monopoly investigation.”