The antitrust regulators in China are reportedly considering the imposition of a record fine on multinational technology major, Alibaba Group Holding Limited, over its suspected anticompetitive behavior.
The fine could exceed USD 975 million, a sum that was paid by Qualcomm in 2015 over the issue of anti-competitive practices, cited sources close to the matter. The authorities are also weighing whether the Chinese tech giant should divest some part of its assets that are not related to its key online-retailing business.
As per reliable sources, the Alibaba group has come under fire in the past from sellers and rivals for allegedly forbidding merchants from listing on other e-commerce platforms. The practice is called “two-choose-one”.
In addition, following founder Jack Ma’s stinging condemnation of the Chinese regulatory system in October 2020, the Alibaba Group has been put under great scrutiny by Chinese authorities. In December 2020, the country’s State Administration for Market Regulation initiated an antitrust probe into Alibaba.
The news led to the halting of the company’s USD 37 billion planned IPO from Ant Group, the Internet Finance Arm of Alibaba.
While antitrust regulators in charge of Alibaba’s case have not provided an immediate response to the queries on the report concerning the levies, the company has been in the eyes of the Chinese authorities for a while over the concerns of its reach into the day-to-day finance of ordinary Chinese people.
According to the Hangzhou-based internet giant, it has been extending complete cooperation with the investigation conducted by the State Administration for Market Regulation.
Hong Kong shares of the company spiked by 1.7% on the morning of 12th March 2021, after its New York shares surged by 2.8% overnight during a broad stock market rally. It is to be noted that the New York shares of the company are still down about a quarter as compared to their levels in October 2020.
Source credit –