Alibaba, the Chinese tech giant, said that it accepts the record penalty imposed by the country’s anti-monopoly regulator.
Recently, Chinese regulators had imposed a $2.8 billion fine after a probe determined that it had abused its market position for years. The fine amounts to about 4 percent of the company’s 2019 domestic revenue.
Alibaba Group’s executive vice chairman Joe Tsai indicated that regulators have taken an interest in platforms like Alibaba as they grow in importance. “We’re happy to get the matter behind us, but the tendency is that regulators will be keen to look at some of the areas where you might have unfair competition,” he said in an investor call.
The company added that it was not aware of any further anti-monopoly investigations by Chinese regulators, though it signaled that Alibaba and its competitors would remain under review in China over mergers and acquisitions.
The main issue for regulators was that Alibaba restricted merchants from doing business or running promotions on rival platforms. The company said it would introduce measures to lower entry barriers and business costs faced by merchants on eCommerce platforms.
Alibaba says that the discussions with regulators have been amicable so far but there will be more oversight and scrutiny of it and other firms. The eCommerce giant indicated that while for now Alibaba is in the clear in terms of future investigations, the same could not be said for other firms in this sector.
China’s scrutiny of tech firms
Chinese tech firms are a powerful force in the country, and the country’s government is keen to regulate them. The penalty is the latest in a chain of events targeting the company that kicked off last October, after its co-founder Jack Ma criticized regulators, suggesting they were stifling innovation.
Shortly after the speech, Chinese regulators halted the share market launch of Ant Group, which is Alibaba’s sister company and China’s biggest electronic payments provider. Ant Group was expected to be last year’s biggest share market launch on the Hong Kong exchange.
But Alibaba isn’t the only Chinese company to come under scrutiny by China’s increasingly assertive regulators. Last month, China’s State Administration for Market Regulation (SAMR) said it had fined 12 companies including Tencent, Baidu and Didi Chuxing (which are among China’s largest tech companies) over 10 deals that violated anti-monopoly rules.
Related: Chinese govt pushes Alibaba to sell its media assets: Sources
