Alibaba could be hit with a record fine for its monopolistic practices as the e-commerce giant founded by Jack Ma has been under intense scrutiny by Chinese regulators since last December, AFP reported Friday, citing the US newspaper The Wall Street Journal.
Alibaba could be fined more than the $975 million Qualcomm Group paid in 2015 for anticompetitive practices, the Wall Street Journal reported, citing sources familiar with the matter, making it the highest monopoly fine ever levied in China.
Neither Alibaba nor China’s State Administration of Market Regulation responded Friday to AFP’s questioning on the news.
Alibaba, founded by billionaire Jack Ma, has been under intense scrutiny by Chinese regulators for months, with China’s State Administration of Market Supervision announcing the launch of an anti-monopoly investigation into Alibaba last December. But the authorities have not made public any further details of the allegations, other than those related to its “two-for-one” exclusive agency agreement.
Alibaba’s “two-for-one” implementation was reportedly investigated by the General Administration of Supervision for alleged monopolistic practices. “Two-for-one” means that online shopping platforms require e-commerce companies they work with not to sell their products on other platforms, which is a disguised form of exclusivity.
Last November, Alibaba-linked firm Ant Group’s record $3.7 billion initial public offering (IPO) was urgently halted by Beijing authorities. Prior to that, Jack Ma had criticized the role of China’s financial regulators in public forums.
Many analyses have viewed Alibaba’s situation as a directive from the authorities, especially since Ma was able to disappear in front of the public for a Time in the following months.
But the Wall Street Journal reported citing officials familiar with Beijing’s thinking as saying that Chinese authorities do not want “to bring down the tech giant, which is popular among Chinese families and global investors, and that it could be treated more gently than Ant Group as long as it clears its ties with Jack Ma and aligns itself more closely with the Communist Party.”
Alibaba’s Hong Kong-listed shares climbed nearly 2 percent on Friday morning, indicating some market reassurance
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