The controversial “choose 1 in 2” strategy in the past five years in China has finally become qualitative in imposing monopolistic business practices, and Alibaba has become the first “victim” to gender. This country’s official “stunned”.

Penalties of up to 18,288 billion yuan ($ 2.8 billion) issued by China’s State Market Supervision Department against Alibaba account for 4% of the group’s 2019 revenue.

The group of billionaire Jack Ma has continuously encountered bad luck in recent times.

Not merely a punishment, the meaning of the case went far beyond its original purpose. This is said to be a warning to the entire Internet industry in China, and the move also shows Beijing is accelerating its war of antitrust against big tech companies.

Alibaba: “Big trees catch the wind”

In fact, legal disputes over Alibaba’s monopoly conduct have long existed. Starting in November 2015, Alibaba’s “choose 1 in 2” policy under Jack Ma was accused of disrupting the e-commerce market and many platforms repeatedly called for a boycott of this behavior.

It was not until December 2020 that the State Market Administration of China conducted the first antitrust investigation and a final decision was made. Basically, Alibaba immediately expressed its attitude to cooperate with the authorities. “We recognize that today’s penalty is a warning and motivating us, it is a standard and concern for the industry’s development,” an Alibaba representative said in the Letter. customers and the public.

In the opinion of many market analysts, that penalty is inherently beneficial for Alibaba, because conservative policies in recent years have made them gradually lag in e-commerce. This also allows the Internet economic platform to re-focus on sustaining innovation, instead of relying on dominant positions to “protect” the market. More importantly, the warning for Alibaba will form a strong competitive advantage in the market in the future.

Other platforms started to be wary

In addition to warning Alibaba, the penalty serves as a deterrent to the entire Chinese internet industry. After all, the problem of monopoly is not limited to just one platform and with the current scale of operations, it is completely understandable that Alibaba is being targeted first.

Over the years, the platform economy has benefited from the rapid growth and popularity of the Internet. Based on the cumulative effect, the platforms quickly formed certain areas, especially e-commerce. Up to a certain stage, natural monopoly properties will arise and the larger the platform scale, the more obvious the advantage.

However, “if the platforms misuse this advantage, leading to the formation of unfair competition, the behavior is suspected to be illegal”, the punishment that the Administration Department oversees. China has proved it. Realizing the risk, many leading e-commerce platforms such as Taobao, Tmall, JD, 1688 … started to change policies to avoid becoming the next victim of the regulator.

The Internet antitrust campaign in China is accelerating

“This time Alibaba was fined and signaled that relevant departments had tightened antitrust oversight of the platform economy. I believe there will be other antitrust enforcement cases in the future, not just this one, “said a researcher at the Center for Intellectual Property Research, University of Political Science and Law.

In addition, strengthening antitrust and preventing capital expansion causing market disruption is also the Chinese government’s consistent attitude, which was specifically mentioned at the Central Economic Work Conference held. at the end of last year. However, from the development context over the years, the monopoly monitoring here still has a certain delay.

With the rapid development and changing of Internet economic platforms, law enforcement or administrative governance need to keep up with the times, forcing the Chinese authorities to speed up the antitrust war. This is expected to create fair competition and maintain standardized market vitality in the future.

Alibaba was fined $ 2.8 billion for alleged monopoly.

JD.com, Meituan and ByteDance lead China’s first group of Big Tech companies to commit to complying with the law after China Market Surveillance Agency (SAMR) asked them to “learn lessons” from Alibaba. Group Holding in Beijing’s latest antitrust investigation.

On April 14, 12 out of 34 tech companies released a public statement pledging to do business in compliance with the law after SAMR warned of Alibaba’s recent antitrust sanctions and conducted self-testing. next month.

Earlier, e-commerce giant Alibaba was fined a record $ 2.8 billion for forcing small businesses to sell exclusive products on the platform. Monopolistic behavior is understood as how businesses eliminate competition of competitors by forcing customers to choose “one of two”.

JD.com has made eight promises including “never taking measures to force sellers to choose either and never abusing a dominant market position or making any exclusive deals. “. The e-commerce group also said it will “never publish illegal advertisements and never sell products of substandard quality”.

Meituan’s delivery staff.

Meituan promised not to impose unreasonable measures forcing sellers to “choose one of the two” and would not abuse its market position to limit competition. In addition, the company is committed to providing full support to the Chinese regulatory authorities. “Once we find evidence of illegal conduct, we will report it to regulators in a timely manner and readily cooperate with any investigation,” Meituan said.

ByteDance, the owners of short video apps TikTok and Douyin, made 13 promises in its public statement. China’s most valuable unicorn company says it will “not illegally collect and misuse user data” and adhere to “minimum guidelines” in collecting data from users. E-commerce platform Pinduoduo said it will “proactively assume more social responsibility”, as well as comply with legal and regulatory requirements.

The rest of the companies are expected to announce their public commitment over the next two days

Beijing’s targeting of key Big Tech firms including Kuaishou, Bilibili and Didi Chuxing comes at a time when the Chinese government is resolutely using antitrust laws and other regulatory methods to halt. out-of-control expansion.

SAMR has accused major tech companies of misconduct such as forcing sellers to choose only one trading platform, abuse of market dominance, abuse of big data to unfair pricing. for certain customers, ignoring poor quality products, leaking customer data, and tax evasion.

“No one is allowed to cross the regulatory lines and not touch the legal red line,” SAMR said on Tuesday.

34 Internet service providers are on the spot, many of which are listed on US and Hong Kong exchanges. Companies were asked to “raise responsibility and give priority to the national interests”.

“Companies must absolutely avoid disordered capital expansion to ensure China’s economic and social security, you must absolutely avoid monopolies to ensure fair competition,” according to Beijing’s statement towards Internet service platforms.

SAMR says companies have one month to do a “self-check and self-repair”, after which the government will conduct follow-up and “severely punish” those companies that fail to address the misconduct.