China has imposed a billion dollar fine for monopoly practices on the Chinese web store giant Alibaba. It concerns a fine of 18.2 billion yuan, which equates to 2.3 billion euros.
The Chinese competition regulator has imposed the fine because the online store group, founded by billionaire Jack Ma, has abused its dominant position. The online store disadvantaged sellers who offered their goods on Alibaba as well as other sales platforms.
In addition to the fine, the webshop group must thoroughly review trade practices and submit reports to the regulator on self-regulation for the next three years.
First competition investigation
According to the American business newspaper Wall Street Journal, this is the highest Chinese fine for a company ever. The fine is equal to 4 percent of Alibaba’s domestic sales in 2019. The newspaper further reports that the web company has announced that it will abide by the sanction.
The authorities in China have been tightening up the supervision of companies such as Alibaba for some time. The government wants to take tougher action against large corporations with a lot of power, which were recently bound by few rules. For example, the IPO of Alibaba’s subsidiary and financial services provider Ant Financial was stopped at the last minute last year.
The investigation into the concern, which began in December last year, is seen as an important development because it concerns China’s first competition investigation into a Chinese internet company.
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