China hits Alibaba with $2.8 billion antitrust fine
The Chinese government imposed an antitrust fine equivalent to $2.8 billion on tech and e-commerce company Alibaba, the Wall Street Journal reports.
Why it matters: It's a record penalty in the country and a continuation of Beijing regulators' scrutiny on the business empire of founder Jack Ma, who was ordered in December to transform his Ant Group into a financial holding company overseen by China’s central bank.
By the numbers: The 18.2 billion yuan fine is equal to 4% of Alibaba’s domestic annual sales, per China's antitrust regulator.
- Antitrust fines in the country are capped at 10% of a company’s annual sales.
What they're saying: “Alibaba accepts the penalty with sincerity and will ensure its compliance with determination,” the company said, according to the Journal.
- “To serve its responsibility to society, Alibaba will operate in accordance with the law with utmost diligence, continue to strengthen its compliance systems and build on growth through innovation.”
The big picture: China’s antitrust regulator claimed that Alibaba's business practices limited competition, impinged on innovation, violated the rights of merchants and harmed the interests of consumers.
- Regulators are requiring Alibaba to revamp its operations and submit a “self-examination compliance report” over the next three years, according to the Journal.
- Beijing's antitrust crackdown could hamper the growth of the country's tech sector should authorities regulate with a heavy hand, Axios' Hope King reports.