Alibaba got $2.8b fine for abusing its position

Alibaba got fined $2.8 billion for abusing its dominant market position.

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Alibaba got fined $2.8 billion for abusing its dominant market position. 

The fine was imposed on the tech giant for abusing its authority. The fine imposed is equivalent to 4% of the revenue generated by the company in 2019. China’s State Administration for Market Regulation (SAMR) said a fine was imposed because the company punished merchants for not selling their products on the platform. Moreover, the tech giant also adopted a stern attitude towards other rival companies asking merchants to choose one out of the two. 

“Alibaba accepts the penalty with sincerity and will ensure its compliance with determination. To serve its responsibility to society, Alibaba will operate following the law with the utmost diligence, continue to strengthen its compliance systems, and build on growth through innovation.” Alibaba said in a statement released on Saturday.

Jack Ma, the former chairman of Alibaba formed the regulatory framework of the company back in his tenure. He also initiated a scrutiny system to review policies against merchants.

Last year, China’s regulators abruptly halted the initial public offering of Ant Group, Alibaba’s fintech affiliate, just days before its shares were expected to begin trading in Shanghai and Hong Kong. The government has forced it to restructure to adhere to the same rules and capital requirements that banks have to follow. An investigation has been carried out to look at the company’s dominant position.

The company has not responded to the allegations as of yet. But it has announced to hold a meeting on Monday to talk about regulator’s decision.