The fine of up to $ 2.8 billion is not a small number for Alibaba, and that is just the first blow of the Chinese authorities with e-commerce platforms.
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.
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