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Alibaba’s $2.8 Billion Mistake—What CFOs Should Know About Antitrust Regulations

Alibaba recently addressed merchants, consumers, partners and shareholders, in an open letter on April 10, reaffirming its commitment to more equitable and inclusive practices to promote fair market competition after being hit with a heavy penalty for engaging in anti-competitive practices.

China Fines Alibaba

The Alibaba Group was ordered to pay a hefty $2.8 billion fine for binding merchants to exclusive dealing arrangements that prevented them from offering products on rival platforms. China's State Administration for Market Regulation ("SAMR") opened its investigation on the tech giant on December 24, 2020. Its findings led to the steep penalty under the People's Republic of China Anti-Monopoly Law, which accounts for only 4% of Alibaba's 2019 sales in China's largest issued fine to date. It is a small price that Alibaba was willing to pay to recover from its antitrust slip-up.

"Alibaba would not have achieved our growth without sound government regulation and service, and the critical oversight, tolerance and support from all of our constituencies have been crucial to our development. For this, we are full of gratitude and respect," according to the company statement.



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