China's Alibaba fined for market power abuse

Chinese e-commerce giant Alibaba was fined 18.2 billion yuan ($2.78 billion, €2.3 billion) by regulators on Saturday for violating anti-monopoly rules, state-run media reported.

The State Administration for Market Competition (SAMR) said the company was "abusing its dominant position" to squash rival online retailers.

What is Alibaba accused of?

Regulators opened the investigation into Alibaba in December.

The company is accused of "hindering the free circulation" of goods by forbidding merchants on its popular platforms from using the sites of e-commerce competitors.

The practice is a long-standing one, and the Chinese regulator spelled out in rules issued in February that it was illegal.

The fine was calculated by taking 4% of Alibaba's total 2019 sales of 455.712 billion yuan ($69.5 billion, €58.4 billion).

The company will also have to file self-examination and compliance reports to the SAMR for the next few years.

How has Alibaba reacted to the penalty?

Alibaba said it will accept the fine in a statement. The penalty is a major blow to Alibaba co-founder Jack Ma, one of China's wealthiest men.

In October, Ma gave a speech criticizing Chinese financial regulators for hurting innovation in the country.

In the following month, Ma met with regulators to discuss Alibaba's heavily-scrutinized fintech branch, Ant Group, with the Shanghai Stock Exchange then suspending its initial public offering.

What is Alibaba?

Founded in 1999, Alibaba has quickly grown to become one of the world's largest online retailers as a result of the rising wealth of Chinese consumers.

Its subsidiaries run other web portals, electronic payment services, search engines and cloud computing services.

wd/mm (AP, AFP)