Alibaba Group Holding Limited [NYSE: BABA] declared Monday that it has decided to accept the heavy fine inflicted by anti-monopoly regulators of China. The Chinese watchdogs have imposed a $2.8bn fine after an inquiry showed that BABA had exploited its position in the market for years.
Joe Tsai, Vice Chairman of BABA disclosed that the regulators started taking interest in the firms which have more strong position in the market. That’s what happened to BABA. Alibaba gave the credit for its strong growth the regulators as their sound policies help the firm to grow. Critical oversight is necessary for the growth of the enterprise.
Reason of the Heavy fine
The Chinese watchdog has informed BABA about the fine after it discovered that Alibaba prevented merchants from doing business or running advertisement on competitive platforms. It has been disclosed that the fine sums to about 4% of the 2019 domestic revenue of the firm. After the heavy fine on Alibaba, it seems like there will be more supervision and careful examination of BABA and other firms.
The Chinese giant disclosed that it would launch necessary measures to reduce entry barriers and business expenses encountered by traders on e-commerce platforms. The e-commerce giant has got good instructions on some particular problems under the monopoly law after the watchdog has imposed punishment on the giant.
BABA revealed that after the heavy fine there will be no impact on business. The executives told the investors in the message that it may be the largest and the first Chinese tech firm to attract the attention of Watchdogs, but we are absolutely not the last.