Jack Ma’s company Alibaba (BABA) will have to pay the Chinese authorities record fines. A study by the China Ministry of Commerce showed that Alibaba Restricted Competition, Violates Seller Rights, and Hurts Consumers. China’s antimonopoly regulators have fined Alibaba $ 2.78 billion, reports The Wall Street Journal. China’s State Administration for Market Control also publishes a statement of fines on their website.
China’s investigation of Alibaba and its marketplaces revealed the Alibaba had a policy of “forced exclusivity,” in which the Alibaba required the Alibaba’s sellers to not work with competitors. According to the Wall Street Journal, the $ 2.78 billion fine represents a record fine for a Chinese company. The Alibaba was accused of violating antitrust laws. To date, it has been called the largest fine in history.
According to the report, the Chinese authorities also imposed financial sanctions and demand for Alibaba to overhaul its company operations, which restricted competition, hindered innovation, violated sellers’ rights, and harmed consumers. Considering current exchange rates, the fine is approximately 4% of its total sales in China in 2019, which totaled 455.71 billion yuan ($69.67 billion).
At the end of 2020, the PRC regulators focused their attention on Alibaba. They suspended Ant Group’s IPO in November. The Alibaba’s fintech subsidiary was supposed to go public simultaneously on two exchanges, in Shanghai and Hong Kong, and it would have been the most extensive IPO in history. Alibaba’s chairman Jack Ma criticized the Chinese authorities’ work a few days after the listing was suspended. An antitrust investigation was launched against Alibaba later.
On Friday, the Alibaba Group (BABA) was down -2.16% from its previous close price, or -$4.93 from this morning’s closing price. The shares reached a low of $221.32 during the session, while the day’s high was $225.07. According to data provided by Barchart, BABA closed the previous session at $228.24, while its trading volume was estimated to be 19.63 million.