Online retail giant Alibaba Group Holding (BABA) received a record $2.75bn (£2bn) fine on Saturday from Chinese regulators for anti-monopoly violations.
The company, owned by billionaire Jack Ma, one of China’s most successful entrepreneurs, has been accused of abusing its dominant market position for several years.
The State Administration for Market Regulation (SAMR) said Alibaba, which is listed in New York and Hong Hong, restricted competition by stopping some sellers from using rival online e-commerce platforms since 2015.
"This penalty will be viewed as a closure to the anti-monopoly case for now by the market," Hong Hao, head of research at BOCOM International in Hong Kong, told Reuters news agency.
"It's indeed the highest profile anti-monopoly case in China. The market has been anticipating some sort of penalty for some time... but people need to pay attention to the measures beyond the anti-monopoly investigation."
The fine amounts to around 4% of the company’s domestic revenues.
Alibaba said in a statement that it had accepted the ruling and would ensure it is compliant. The company is set to hold a conference call on Monday to discuss the penalty.
“We will tackle it openly and work through it together,” chief executive Daniel Zhang said in a memo to staff seen by Reuters. “Let’s improve ourselves and start again together as one.”
It comes as other tech giants in China are likewise facing increasing pressure from regulators who are worried about their growing influence.
In October, Ma publicly criticised the country’s regulatory system and a month later authorities blocked a planned $37bn stock market float by Ant Group, formerly known as Ant Financial, Alibaba’s internet finance arm.
The initial public offering (IPO) was set to be the largest ever.
Last month 12 companies were also fined over deals that violated anti-monopoly rules. The companies included Tencent (0700.HK), Baidu (9888.HK), Didi Chuxing, SoftBank (9984.T) and a ByteDance-backed firm amongst others.
Alibaba’s fine is more than twice as large as the $975 million paid in China by Qualcomm (QCOM), the world’s biggest supplier of mobile phone chips, in 2015 for anticompetitive practices.
Earlier this year Jack Ma was suspected missing after not making a public appearance since 24 October when he made his speech at the Shanghai finance forum criticising Chinese financial regulation and calling for reform.
He co-founded Alibaba Group in 1999. The company has grown to become one of the world’s biggest e-commerce companies and has sidelines in everything from film distribution to healthcare.
The business is often compared to Amazon (AMZN) in the US. Ma stepped down from Alibaba in 2019 but remains the public face of the business.
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