Alibaba fined 2.35 billion euros in China for abusing market position

Chinese Alibaba has been fined EUR 2.35 billion in its home country for ‘monopolistic business practices’. One of the reasons for the investigation was the fact that Alibaba prohibits sellers from trading on its platform and the competitor at the same time.

Alibaba is the parent company of services like AliExpress, Taobao, AliPay and more. The fine is equivalent to four percent of the company’s domestic turnover in 2019. However, since the outbreak of the corona virus, the company has already performed much better: in the last three months of 2020, for example, the company made a profit of 10 billion euros. In addition to paying the fine, Alibaba must also “stop its anti-competitive practices and report regularly on its behavior for three years.”

The investigation into Alibaba has been ongoing since December. According to the Chinese, it is the toughest enforcement action it has taken to date, writes The New York Times. In comparison, Qualcomm was fined an antitrust fine of €860 million from China in 2015. Alibaba said in a statement “it sincerely accepts” the fine and that it “will adapt its systems to better fulfill its responsibility to society”.

In recent years, China has wanted to take tougher action against alleged monopolies. That is one of the reasons why Ant Group’s IPO was canceled at the last minute. The Times notes that Alibaba ‘recently’ applied for a presence on WeChat. That is the chat service of its biggest competitor, Tencent. Previously, Alibaba wanted nothing to do with this company. The move may be indicative of a change in strategy.