Alibaba’s legal woes look far from over

China’s top e-commerce firm Alibaba was hit with a $2.75bn fine for antitrust violations. But this may not be the end of the matter, with regulators expressing concerns about its non-core businesses.

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.

Recommended

What happened to Credit Suisse?
Economy

What happened to Credit Suisse?

UBS acquired Credit Suisse at £2.65bn on Sunday afternoon – significantly below its closing value on Friday, which was around £7bn. We take a look at …
20 Mar 2023
Can I avoid IHT by stuffing all my money into a pension?
Personal finance

Can I avoid IHT by stuffing all my money into a pension?

The ditching of the lifetime allowance could enable millions of pension savers to avoid inheritance tax. We explain how.
20 Mar 2023
Profit from the rise of shareholder activism in Japan’s small companies
Share tips

Profit from the rise of shareholder activism in Japan’s small companies

A professional investor tells us where he’d put his money. Daniel Lee, head ofJapan Research, AVI Japan Opportunity Trust, highlights three promising …
20 Mar 2023
When will interest rates go up?
UK Economy

When will interest rates go up?

The Bank of England has many things to consider ahead of its decision later this week.
20 Mar 2023

Most Popular

Government plans could see NS&I boost interest rates
Savings

Government plans could see NS&I boost interest rates

The government-backed bank has a new funding target, which could prompt it to boost the rates on its Premium Bonds, ISAs and bonds.
16 Mar 2023
Share tips of the week – 17 March
Investments

Share tips of the week – 17 March

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages
10 Mar 2023
How to make your child a tax-free millionaire by age 37
Investments

How to make your child a tax-free millionaire by age 37

Exclusive research for MoneyWeek reveals how funding an ISA and a pension for your child until age 18 could build up a seven-figure sum by the time th…
14 Mar 2023