In a monumental case this month, the Chinese multinational tech giant Alibaba has been fined a historic $2.8 million United States Dollars (roughly 18.2 billion Chinese Yuan) by the Chinese government. The tech giant has been penalized by the Chinese government for monopolizing and abusing its market dominance. Alibaba Group Holding Ltd. is part of an investigative anti-monopoly probe from Beijing into the Chinese tech industry.
The fine is roughly three times the size of the previous fine issued under similar circumstances to Qualcomm Inc., a U.S. chipmaker in 2015. China’s antitrust watchdog says the amount of the fine was determined in line with Alibaba’s 2019 domestic revenue, of which it represents roughly 4% of. The agency said in a statement on Saturday that they would also be looking to strengthen their internal controls of Alibaba to ensure they could protect merchants and customers alike from a lack of market competition.
Jack Ma founded Alibaba in April 1999 in Hangzhou, China – where the company still keeps its headquarters. Ma has gone on to become the world’s richest man, just as Alibaba has become one of Asia’s most dominant shopping channels of choice. The fine represents a closure for the Ant Group Co (Jack Ma’s empire in legal terms), after a long period of scrutiny from the Chinese government.
Similar to the USA’s recent big tech trial of Google, Amazon, Apple and Facebook, the Chinese government was concerned with the lack of options available for both merchants and customers. The way the tech giants run their business is accused of being exclusionary and of squashing a competitive market environment. Governments are concerned that companies such as Alibaba and other tech giants use actions like mergers and acquisitions to accrue power in their industries. It seems Alibaba has been used to set an example to other players in the industry with this latest historic fine.