Shares in China’s top e-commerce firm Alibaba jumped by 10% after it received a $2.75bn fine for antitrust violations, says Callum Jones in The Times. Officials “could have fined the company more than twice that amount”. The antitrust probe concerned claims that the firm “abused its market dominance” by forcing merchants “to choose between doing business on its platforms and others”. It was launched just after Alibaba’s founder Jack Ma (pictured) vanished from public view for months last autumn after criticising the Chinese government.
Investors clearly think the fine is a price worth paying for Alibaba to put its legal woes behind it, especially since it is only “about 4% of domestic sales in 2019” says Lex in the Financial Times. But this may not be the end of the matter. Regulators have “voiced concerns” about Alibaba’s non-core businesses. What’s more, to remain in Beijing’s “good books”, Alibaba will have to spend more on “corporate good deeds... that support small businesses in rural regions”, lowering profits.
US giants such as Amazon should take note, says Gina Chon on Breakingviews. The fine shows that “it’s possible to define the market and single out data usage in ways that US regulators haven’t yet managed to do, but could”. Third-party merchants say Amazon “unfairly competes” against them when it “sells its own products using information gleaned from its platform”. Still, for now Amazon’s position seems secure, since US courts tend to be relaxed about such behaviour if it enhances “consumer welfare” by keeping prices low.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
House prices rise 2.9% – will the recovery continue?House prices grew by 2.9% on an annual basis in September. Will Budget policies and ‘higher-for-longer’ rates dent the recovery?
-
Nvidia earnings: what to expectNvidia announces earnings after market close on 20 November. What should investors expect from the semiconductor giant?
-
Investing in a dangerous world: key takeaways from the MoneyWeek SummitIf you couldn’t get a ticket to MoneyWeek’s summit, here’s an overview of what you missed
-
DCC: a top-notch company going cheapDCC has a stellar long-term record and promising prospects. It has been unfairly marked down
-
How investors can use options to navigate a turbulent worldExplainer Options can be a useful solution for investors to protect and grow their wealth in volatile times.
-
Invest in Hilton Foods: a tasty UK food supplierHilton Foods is a keenly priced opportunity in an unglamorous sector
-
HSBC stocks jump – is its cost-cutting plan already paying off?HSBC's reorganisation has left questions unanswered, but otherwise the banking sector is in robust health
-
Lock in an 11% yield with SabreTips Sabre, a best-in-class company is undervalued due to low profits in the motor insurance industry. Should you invest?
-
Byju’s – the startling rise and fallIndia’s educational technology start-up Byju's attracted big-name backers and soared to vertiginous heights during Covid. It has now plummeted. What happened?
-
Shares in luxury goods companies take a hit – will they recover?Luxury goods companies have run into trouble, and the odds of a rapid recovery have receded. What next?
