(Bloomberg) — After China imposed a record antitrust fine on Alibaba Group Holding Ltd., the e-commerce giant did an unusual thing: It thanked regulators.
“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,” the company said in an open letter. “For this, we are full of gratitude and respect.”
It’s a sign of how odd China’s crackdown on the power of big tech has been compared with the rest of the world. Mark Zuckerberg and Tim Cook would likely not express such public gratitude if the U.S. government were to hit Facebook Inc. or Apple Inc. with record antitrust fines.
But almost everything about China’s regulatory push is out of the ordinary. Beijing regulators wrapped up their landmark probe in just four months, compared with the years that such investigations take in the U.S. or Europe. They sent a clear message to the country’s largest corporations and their leaders that anti-competitive behavior will have consequences.
For Alibaba, the $2.8 billion fine was less severe than many feared and helps lift a cloud of uncertainty hanging over founder Jack Ma’s internet empire. The 18.2 billion yuan penalty was based on just 4% of the internet giant’s 2019 domestic revenue, regulators said. While that’s triple the previous high of almost $1 billion that U.S. chipmaker Qualcomm Inc. handed over in 2015, it’s far less than the maximum 10% allowed under Chinese law.
The fine came with a plethora of “rectifications” that Alibaba will have to put in place — such as curtailing the practice of forcing merchants to choose between Alibaba or a competing platform — many of which the company had already pledged to establish.
Read more: China Fines Alibaba Record $2.8 Billion After Monopoly Probe
Alibaba Chief Executive Officer Daniel Zhang on Saturday declared his company now ready to move on from its ordeal, while China’s Communist Party mouthpiece People’s Daily issued assurances that Beijing wasn’t trying to stifle the sector.
The Hangzhou-based firm “has escaped possible outcomes such as a forced breakup or divestment of assets. The penalty will not shake up its business model, either,” said Jet Deng, an antitrust lawyer at the Beijing office of law firm Dentons.
Still, neither Zhang nor state media addressed lingering questions around the extent to which Beijing remains intent on reining in its internet and fintech giants, a broad campaign that’s wiped more than $250 billion off Alibaba’s valuation since October. The e-commerce giant’s speedy capitulation also underscores its vulnerability to further regulatory action — a far cry from just six years ago, when Alibaba openly contested one agency’s censure over counterfeit goods on Taobao and eventually forced the State Administration for Industry and Commerce to backtrack on its…
Read More: finance.yahoo.com