China fined its eCommerce giant Alibaba Group Holding Ltd (NYSE: BABA) a record £2.0 billion on Saturday after an investigation found it in breach of the anti-monopoly regulations. The investigation concluded that Alibaba has, for several years, abused its dominant position in the market, resulting in a fine that translates to 4% of its domestic revenues in 2019.
The NYSE-listed shares of Alibaba closed the regular session more than 0.5% down at £162.90 per share on Saturday. In comparison, the Chinese multinational technology company had started the year 2021 at a per-share price of £166.21 after touching a high of £197.56 per share in the third week of February.
SAMR launched its antitrust investigation in December
Alibaba Group has been under fire since October 2020, when its founder Jack Ma publicly criticised China’s regulatory system. The next month regulators benched Ant Group’s (Alibaba’s fintech subsidiary) initial public offering worth £27 billion that was expected to be the world’s largest IPO ever.
China’s SAMR (State Administration for Market Regulation) launched its antitrust investigation into the Alibaba Group last year in December. In February, Alibaba said that its cloud division turned profitable for the first time in the fiscal third quarter.
The fine announced on Saturday might be the end of antitrust woes for Alibaba. Still, Ant Group is yet to nod to the revamp recommended by the regulator that won’t only limit a few of its unchecked businesses but also minimise its valuation sharply.
BOCOM’s research head Hong Hao comments on the news
Head of research Hong Hao of BOCOM International commented on the news on Saturday and said:
“This penalty will be viewed as a closure to the anti-monopoly case
