Alibaba Fined $ 2.8 Billion
发布时间：2021-09-30 14:28:09 来源于：CBF
摘要：
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The announcement is the latest development in the government's increased oversight on internet companies to avoid the "disorderly expansion of capital".
Chinese regulators on April 10 imposed a 18.23 billion yuan ($2.8 billion) fine in an anti-monopoly investigation of Alibaba Group Holding Ltd.
The State Administration for Market Regulation, which launched the probe into the e-commerce giant in December, charged Alibaba with abusing its market dominance.
The watchdog said its investigation concluded that Alibaba had hindered online retail in China, affected innovation in the platform-based internet economy, hurt the lawful rights of merchants and damaged consumers' interests.
The fine was equivalent to four percent of Alibaba's domestic sales in 2019, according to the statement. The company's earnings report showed it registered profits of about $12 billion in the last three months of 2020.
Alibaba's $2.78b fine shows emphasis on fairness
The record $2.78 billion antitrust fine on Alibaba Group Holding Ltd sets a milestone for China's antitrust efforts, which the country is using to maintain fair market order for healthy development of the internet economy, experts said.
Sun Nanxiang, a researcher at the Chinese Academy of Social Sciences' Institute of International Law, said that antitrust measures are a worldwide trend and the ultimate purpose is to leverage legal tools to restore fair and effective competition in the market.
For years, United States' tech giants like Google, Apple and Amazon have been facing continuous scrutiny and fines from government authorities globally for monopolistic behaviors. European Union regulators hit Google with a record 4.34 billion euro ($5.16 billion) antitrust fine in 2018 for using its Android mobile operating system to squeeze out rivals.
"Anti-monopoly supervision over those tech giants didn't cause them to lose core competence, but helped them to stimulate innovation and entrepreneurship and, at the same time, restore market confidence," Sun said.
"Alibaba accepts the penalty with sincerity and will ensure its compliance with determination," Alibaba said in a statement soon after the decision was announced.
"To serve its responsibility to society, Alibaba will operate in accordance with the law with utmost diligence, continue to strengthen its compliance systems and build on growth through innovation."
Regulators highlighted what they called the company's malpractice in forcing collaborating merchants to choose between Alibaba's online marketplaces and those of its competitors' for selling their products, which stifled fair market order. Alibaba had 779 million annual active users in 2020.
The announcement is the latest development in the government's increased oversight of internet companies since last year, which has aimed to curb monopolies and avoid the "disorderly expansion of capital".
Commentary on the fine in People's Daily said that to regulate is to ensure better development, and "the act of tugging at the sleeve is also an act of love", which means that self-correcting checks on minor misconduct is meant to avoid larger missteps.
"Regulating the fast-expanding internet sector doesn't contradict bolstering its benign development. They are instead complementary and mutually reinforcing, which holds true even on a global scale," it said.
"The penalty serves to guide the company's development, purify the industry's environment and forcefully safeguard market order for fair competition," it added.
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Alibaba: Antitrust penalty won't bring 'material negative impact'
Alibaba Group Holding Ltd said on April 12 the latest antitrust penalty is unlikely to exert "material negative impact" on its business, and pledged to invest more on better servicing both merchants and customers.
"We don't expect material negative impacts (against) this change of arrangement," said Daniel Zhang, chairman and CEO of Alibaba in a conference call to investors on April 12. "We don't rely on exclusivity to retain our merchants."
Zhang said previously, only a number of flagship stores operated directly by brands were under that exclusivity model. Given the ubiquity of multiplatform strategies by merchants, he said they are free to work with Alibaba under the flagship format, or under distribution system with other peer platforms, or collaborate with distributors.
Instead, the company will further strengthen customer experience and provide new tools to merchants with lower costs, by waiving service fees and improving technologies. Category expansion, new brands introduction and new category incubation remain key to business growth.
The move will incur additional costs, which Zhang said are "not one-off costs but a necessary investment" to enable merchants to operate better.
The management team said they feel "comfortable" that there is nothing wrong with the company's fundamental business model, and reassured investors that the model is "fully endorsed and affirmed by the authorities" to shore up the country's economic growth and helps promote innovation.
"The good thing is we have gone through this process with the regulators, we've gotten to know their thinking well," said Executive Vice-Chairman Joe Tsai. "We have very established plans correcting some of the practices…and we have established very good internal control and compliance systems to continue to comply with the law."
Executives said data privacy and data sharing are areas where the regulators show the most concern, but this would apply to all large-scale internet companies not only in China but around the world.
"We have reserved billions of renminbi (Chinese currency) in additional annual spending to support initiatives in the future year," said Chief Financial Officer Maggie Wu in the call.
Wu said the fine will be reflected in the March quarter of the 2021 fiscal year. Alibaba's Hong Kong-listed shares soared 5.5 percent as trading commenced at 9:30 am on April 12.
Ant Group to set up financial holding firm in response to probe
Ant Group, which offered mobile payment and consumer credit services, will apply to set up a financial holding company to ensure its financial-related businesses are fully regulated following an antitrust probe.
The company handling the transactions of Alibaba Group's e-commerce platforms shall return its payment business to the origin of "serving consumers and small and micro businesses", according to a notice published on the Hong Kong stock exchange by Alibaba, which owns a 33 percent stake in Ant.
Ant would also set up a personal credit reporting company and apply for a personal credit reporting license.
The company said it would carry out personal credit reporting in compliance with relevant laws and regulations, strengthen personal information protection and effectively prevent the abuse of data.
Two flagship credit lending services, Jiebei and Huabei, will be folded into its consumer finance company, which is subject to stricter regulation.
In a statement published on April 10, four government agencies including the People's Bank of China -- the central bank -- ordered Ant to cut off "improper connections" between its payment platform and its financial products, among a bevy of government measures to bar the "disorderly expansion of capital" and rein in financial risks.
Chinese authorities plan to turn Ant Group into a financial holding company whose financial activities are put under stricter regulatory supervision in a move related to a monthlong antitrust probe.
A "comprehensive and actionable "revamp plan of Ant was released on Monday, providing a business overhaul in five aspects where the company should work to "correct its behavior of unfair competition", according to a joint statement by four government agencies including the People's Bank of China, the central bank.
The company should end its monopoly on information collection, improve corporate governance, and manage liquidity risks of important fund products and actively reduce the balance of its money market fund Yu'EBao.
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