The internet giant Alibaba has been fined 18.2 billion yuan (about $ 2.8 billion) in one of the largest fines ever imposed on a tech company. The reason: abuse of a monopoly position, according to the Chinese authorities. Namely, the equivalent of 4% of Alibaba’s national annual sales (approx. 455,712 million yuan in 2019), a figure that was ultimately higher than expected.
According to The Wall Street Journal, the fine comes after an antitrust investigation that the Government of China Has made in recent months. The investigation sought to see if Alibaba was preventing merchants from selling their products on third-party platforms. After the investigation, it was determined that Alibaba with its practices had a negative effect on competition (other stores and online platforms).
The Chinese regulator that Alibaba with its practices used the data and algorithms to strengthen its position in the market. As a result, aside from the fine, Alibaba will have to reduce these tactics and report to the Chinese Government for the next three years.
However, after this fact was known last weekend, the shares of the company shot up to The shares of the group Alibaba rose 6.5% only on Monday’s day, adding $ 40 billion to its global market value.