- 12 April 2021
- Transport / Logistics Services
Alibaba has been fined by the Chinese government for abusing its market dominance. The $2.75 billion fine by the State Administration for Market Regulation (SAMR) amounts to the equivalent of 4% of the online giant’s 2019 revenues.
The company stated: “We accept the penalty with sincerity and will ensure our compliance with determination. On this occasion, the entire team at Alibaba would like to express our gratitude to the trust and patience that our merchants, consumers, partners and shareholders have given us. We would like to share our thoughts and plans for the long-term healthy development of our business in the future.
Over the past several months, we fully cooperated with the SAMR investigation and seriously studied the government’s policies and expectations for Internet platform economies. In this connection, we conducted a self-assessment of, and implemented improvements to, our internal systems while ensuring stable operation of our business. The penalty issued today served to alert and catalyse companies like ours. 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.
Internet platform economies are new economic structures created out of the latest cycle of technological revolution. Because of China’s economic and technology development, as well as regulatory support for innovation, Alibaba has been given the opportunity to explore and create platform business models such as Taobao and Tmall with the help of millions of small- and medium-sized merchants and hundreds of millions of consumers. The platform model lowered the costs of starting and doing business, improved efficiency and enhanced circulation of economic activities. Today, Internet platform economies have entered an entirely new phase. They are an integral part of people’s everyday life and affect all dimensions of the broader economy. It is not lost on us that today’s society has new expectations for platform companies, as we must assume more responsibilities as part of the nation’s economic and social development. At the same time, we are cognizant that the value of platforms comes from helping participants to succeed through integrating and sharing resources, as well as continuously creating value for society.”