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Friday, August 12, 2022
Home Categories Regulatory BREAKING: Alibaba Fined By The Chinese Regulators!

BREAKING: Alibaba Fined By The Chinese Regulators!

We have recently reported that the EU is trying to curb the big tech excess and stram up the regulations to ensure that customers are protected from any form of predatory business behavior, as well as have their privacy respected. On Thursday, the French regulator halted Google and Amazon for tracking cookies.

It looks it is not only the EU that is halting the big tech. Today, we got the news from China about the 500, 000 yuan (which translates to approximately $76 thousand) fine imposed on the Alibaba Group, Tencent Holdings-backed China Literature, and Shenzhen Hive Box by Chinese regulators. The fine is for inadequate reporting of deals for anti-trust reviews. The amount of the fine is to be paid by each company. 

Chinese State Administration Of Market Regulation Fines The Giants

Reuters reported on Monday that the Chinese State Administration of Market Regulation (SAMR) have come to the decision after reviewing the giant company’s deals. In the reviewed deals, Alibaba’s investments in the mall operator Intown, as well as the China Literature’s acquisition of New Classics Media were included. 

Shares Of The Companies Reaching Their December Lows

The shares of Tencent and Alibaba both fell after the news, both reaching their December low, with Alibaba falling by 2,5% and Tencent down by 2,8%.

In similarity to the EU, China has also stated they are in the process of making their oversight of the big techs more strict, as they have built monopolies over the years and “amassed power to misuse consumer data and violate consumer rights”, as Reuters reports. 

China Attempts To Prevent Big Techs From Creating Monopolies

Last month, Beijing and chinese regulators published the first draft of the rules that can prevent building monopolies by the internet giant and it is considered as the first big regulatory step that China makes to go against the sector. These recent movements, accompanied by the latest statement by SAMR show that the Chinese are serious about ensuring fair market competition and tightening the regulations and laws in order to force the companies to obey fair practices. 

Alibaba Is The Cautionary Tale

SAMR has earlier issued a statement in which they point out that “the Internet industry is not outside the oversight of anti-monopoly law” and that fining Alibaba is the cautionary tale that is supposed to prove that anti-monopoly supervision on the Internet will bo more severe. 

In the past years, a large portion of Alibaba’s expansion has been through aggressive acquisitions. A similar case could be observed in Tencent.  

Response Of The Companies

China Literature has responded to the news and the company denies the accusations and claims that they are following all of the necessary regulatory order. Alibaba has not commented on the news as of yet.

It Is Not About The Size Of The Fine

One can claim that looking at the huge size of the deals, a fine of $76 thousand is nothing to these companies. However, it is not about the size but rather about alarming the others that while the big techs have been thriving for the past year, now the regulators are going to be significantly more strict with their restrictions and the internet companies that have built oligopolies or monopolies in the latest years will not go unpunished for such practices.

Nel Tomczyk
Nel is a writer for RegTech Global. From her past experience, she gained a deep understanding of fintech, AI, regulations, and new technologies. She has vast experience in journalism and entrepreneurship.

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