The State Administration of Market Supervision filed an investigation into Alibaba Group Holdings on abuse of its dominant market position in the online retail platform service market in China in accordance with the Anti-Monopoly Law.
The investigation shows that Alibaba Group’s “choice of two” behavior eliminates and restricts competition in the online retail platform service market in China, hinders the free circulation of commodity services and resource elements, affects the innovation and development of the platform economy, and infringes on the business of the platform. The legitimate rights and interests harm the interests of consumers, and constitute the “Anti-Monopoly Law”, which prohibits “unreasonable reasons, restricting the counterparty of the transaction can only conduct transactions with the abuse of market dominance” behavior.
The State Administration for Market Regulation decided to order Alibaba Group to stop illegal activities and impose a fine of 4% of its sales in China of 455.712 billion yuan in 2019, totaling 18.228 billion yuan ($2.8bn). At the same time, in accordance with the “Administrative Punishment Law” that adheres to the principle of combining punishment and education, the “Administrative Guidance” was issued to Alibaba Group, requiring it to strictly implement the main responsibility of platform enterprises, strengthen internal control and compliance management, maintain fair competition, and protect the platform.
Ant Group, an affiliate of Alibaba, will apply to become a financial holding company overseen by China’s central bank, overhauling its business to adapt to a new era of tighter regulation for internet companies, according to media reports.