Alibaba, the world’s largest retailer, and e-commerce company got ordered by China to pay a fine of 18.2 billion yuan ($2.8 billion) after antitrust regulators’ remarks.
The antitrust regulators remarked that the online shopping company has been behaving like a monopoly.
On Saturday, the Chinese state media reported:
The fine got imposed after an antitrust investigation into the “exclusive dealing agreements” of Alibaba by the Administration for Market Regulation. The “exclusive dealing agreements” strops retailers from selling their products on the rival e-commerce company’s platform. This practice is known as choosing one company.
The fine imposed on Alibaba is equal to its 4% sales in 2019 in China, as it got reported by Xinhua, the state news agency. A previously recorded fine got made to Qualcomm, the American chipmaker, in 2015.
In recent months, the screws having been getting tightened on the national tech champions in china by Beijing. It is a component of the regulatory crackdown, which got described as the top priority for 2021 by President Xi Jinping. In March, officials got urged by Xi to put all their effect into regulating online companies, ensuring they are maintaining social stability.
Alibaba is one of the companies from China that is the most famous and successful business got co-founded by the noted entrepreneur, Jack Ma.
By imposing such a record fine on a high-profile company, it’s clear that the Chinese regulators are sending their message to other most noted companies of China.
Last November, when he censured the Chinese regulators, Ant Group, the financial affiliate of Alibaba got forced to stop the becoming of the world’s IPO, Ma has been keeping a low profile.
Since then and Ant Group, Ma only made a brief public appearance, the company that owns the digital payment application Alipay got ordered to improve their business.
On Sunday, Alibaba published an open letter in which they said that the company had co-operated with the inquiry and endured the penalty ‘with sincerity and will ensure our compliance with determination.’
They further added:
“Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance, and support from all of our constituencies have been crucial to our development. For this, we are full of gratitude and respect. It is not lost on us that today’s society has new expectations for platform companies, as we must assume more responsibilities as part of the nation’s economic and social development.”
Beijing has their concern about the fact that tech companies have a lot of influence over the financial sector, making the industry weak.
For example, the Ant Group now has held over more than half of the mobile payments in the China market and officials are looking for a method to stop them.
Next can be other tech companies.
Other executives at Pinduoduo and Tencent also got questioned by regulators.
Furthermore, TikTok owners also got fined for having an alleged monopoly behavior.
Tencent is also facing investigation for having a monopolistic practice on its WeChat app.
Tencent Company which has held over a lot of online payments and owns a lot of famous mobile games in China, last month in a statement that it met with regulators voluntarily.
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