The Chinese government says it is issuing a $2.8 billion fine on the e-commerce company Alibaba Group for violating its anti-monopoly regulations.
Alibaba is one of the most influential tech giants in China and the world. The company was under investigation by the Chinese government since December for “suspected monopolistic conduct.”
In a statement Saturday, China’s State Administration for Market Supervision described the company’s behaviors as having “eliminated and restricted competition in the online retail platform service market” as well as having “infringed on the business of the merchants on the platform.”
The fine is 4% of Alibaba’s total 2019 sales in China — which was 456 billion yuan, or over $69 billion.
In a press release issued Saturday, Alibaba said it would accept the fine and “ensure its compliance with determination.”
“The penalty issued today served to alert and catalyze companies like ours,” the release said. “It reflects the regulators’ thoughtful and normative expectations toward our industry’s development. It is an important action to safeguard fair market competition and quality development of Internet platform economies.”
The fine comes after months of complications for Alibaba.
In November, Alibaba’s affiliate, Ant Group, was unable to jumpstart a seismic initial public stock offering, forecasted to raise $37 billion. The process was stopped by financial regulators in Shanghai and Hong Kong just two days before the IPO was expected to list.
In October, Alibaba co-founder and former CEO Jack Ma also made controversial comments during a business conference in Shanghai, publicly taking issue with China’s financial system.
“China does not have a systemic financial risk problem. Chinese finance basically does not carry risk; rather, the risk comes from lacking a system,” he said. He also went on to criticize the country’s state banks, comparing them to “pawnshops.”
Following his comments, Ma did not appear in public again until late January when he spoke via video at an event for rural teachers in China.
Alibaba is expected to further respond to the government’s imposed fine during a scheduled conference call set for Monday morning Hong Kong time.