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.
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