China hits Alibaba with record $2.78bn fine for market abuses

China's regulator imposed a fine of 18.23 billion yuan ($2.78 billion) on Chinese e-commerce mammoth Alibaba for its violation of anti-monopoly laws. The fine, the most significant anti-monopoly penalty ever rolled out by Chinese authorities, accounts for about 4 percent of the company's domestic sales in 2019.

The State Administration for Market Regulation (SAMR) also released administrative guidance, urging Alibaba Group to carry out "comprehensive and profound" self-inspections according to the Anti-monopoly Law to inspect and standardize their business operations.

To improve their internal law compliance system, Alibaba was asked to regularly carry out law compliance training of their executives and employees and report these relevant proceedings to government authorities.

Besides, they should establish a reporting channel and dispute solving mechanism while informing the public of any punitive measures they roll out on businesses, such as halting services or removing their products, the guidance showed.

According to such requirements listed in the guidance, Alibaba has been requested to make a rectification plan and submit the plan to the SAMR before April 30. The company is also required to submit self-inspection reports to the SAMR for three years consecutively.

The platform is also required to establish an external appraisal system by consumers and social experts and carry out cooperation with businesses based on fair and indiscriminative principles.

The SAMR also suggested that Alibaba should reveal a law-compliance situation to the public to seek social inspection.