Alibaba slapped with record fine by Chinese regulators over market abuse practices

Alibaba Group Holdings Ltd (NYSE:BABA) has been hit with a record US$2.8bn fine by Chinese authorities after they said the ecommerce giant had spent years abusing its market position. The penalty follows the conclusion of a Chinese antitrust probe that began in December when the authorities said they were investigating the firm over monopolistic behaviour, more specifically practices including Alibaba’s tactic of using exclusive agreements with merchants to force them to only sell their products on its platform. READ: Alibaba boasts strong growth but remains under regulatory cloud Alibaba’s fine is equivalent to around 4% of its 2019 domestic revenues, however, the company said that it is not aware of any further investigations and the sum was not expected to materially impact its business. Investors also seemed relieved that the company seemed to have finally drawn a line under the issue, with Alibaba’s shares up 5.9% at US$236.37 in pre-market trading in New York on Monday. The investigation formed part of a series of challenges for Alibaba’s billionaire founder Jack Ma, who may have placed his business empire in Beijing’s crosshairs following a speech in October in which he criticised China’s regulators and its state-owned banking system. Chinese authorities previously blocked the initial public offering of Ma’s financial technology giant Ant Group, indicating that the country’s communist government is growing concerned about the unrestrained growth of Chinese tech and the influence and power of their bosses.