Alibaba group has accepted the record $2.8bn (£2.04bn) fine and thanked Chinese authorities for “guidance” following an antitrust probe that found it abused its dominant market position over rivals and merchants.
The shares of Alibaba Group witnessed a surge of over five per cent in Hong Kong following the announcement of the penalty on Saturday as it ended uncertainties around its future.
Alibaba’s executive vice-chairman Joe Tsai, during a conference call with investors and reporters, said: “We feel very comfortable that there’s nothing wrong with our business, the fundamental business model of a platform company… With this penalty decision, we received good guidance on some of the specific issues under the anti-monopoly law,” reported South China Morning Post.
“I would say that we are pleased that we are able to put this matter behind us,” said Mr Tsai while emphasising that he is not aware of any other anti-monopoly related investigations against them.
According to Alibaba’s chief financial officer Maggie Wu, the fine will be paid from their cash reserves of about $70bn (£51.18bn).
The group’s chief executive officer Daniel Zhang on Monday said Alibaba will introduce measures to lower entry barriers and business costs faced by merchants on e-commerce platforms. He said they will take measures such as cutting fees to retain merchants.
“Business-wise, we don’t expect a material negative impact on the change of this arrangement, and once again we will continue to work with our merchants [and] provide them with better services they need to grow their businesses on our platform,” he said.
It is considered that the fine is part of the crackdown on the group that started last year after its founder Jack Ma in October 2020, during a public speech at a summit, attacked Beijing’s banking system and called for reforms while stating that the Chinese banks operate with a “pawnshop” mentality.
Since Mr Ma’s remarks, it has been a troubled journey for the group. In November 2020, Chinese authorities cited “major issues” and suspended the initial public offering (IPO) of the Ant Group, which is backed by Mr Ma, just a couple of days before it was scheduled.
Before the suspension, it was being hailed as the world’s biggest IPO with a value of about $35bn (£25.5bn). Following that, his companies have faced a series of actions including an antitrust investigation into Alibaba.
Additional reporting by agencies
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