The Alibaba office building is seen in Nanjing, Jiangsu province, China, 28 August 2024.
CFOTO | Future Publishing | Getty Images
Alibaba has completed a three-year regulatory “correction” process following an antitrust fine it received on charges of monopolistic practices in 2021, China’s market regulator said on Friday.
Alibaba shares rose nearly 3% in afternoon trading on Friday.
On Friday, China’s State Administration for Market Regulation, or SAMR, said it has been overseeing Alibaba’s compliance with antitrust regulations for the past few years. The remediation work has achieved “good results,” SAMR said, according to a statement translated by Google.
In 2021, China’s SAMR fined Alibaba 18.23 billion yuan ($2.6 billion) as part of an antitrust investigation into the tech giant. The regulator’s focus was a practice that forces merchants to choose between two e-commerce platforms, rather than being able to work with both.
At the time, the regulator said the “choose one” policy and others allowed Alibaba to strengthen its market position and gain unfair competitive advantages.
Since that fine, SAMR has been monitoring Alibaba as it complies with the regulator’s requirements. Alibaba has now completed this process and stopped its monopolistic “choose one,” SAMR said on Friday.
SAMR said it will now guide Alibaba to continue to improve its compliance and efficiency and accelerate innovation.
Completing the regulatory review will help put behind one of Alibaba’s worst problems with Beijing. Analysts at Jefferies said in a note on Friday that the completion of the regulatory process was “positive” for the company, which “underlines that this is a fresh start and ensures operational compliance.”
However, the regulator’s announcement could also signal a continued easing stance by Chinese regulators on private tech companies, following a heavy crackdown that began in late 2020. At that time, Beijing enacted several regulations and moves which aimed to limit the power of domestic technology companies in areas ranging from antitrust to gambling.
Alibaba founder Jack Ma’s empire has been under the spotlight in recent years since regulators blocked financial technology company Ant Group’s IPO in 2020. Ant Group itself has also undergone a regulatory overhaul, with most of the important issues resolved by last year.
Regulatory concerns have been a drag on Alibaba’s stock, which has fallen more than 70% since its peak in 2020. More recently, the company has faced sluggish growth amid increasing competition in China’s e-commerce space, as well as facing a careful Chinese consumer.
The tech titan showed early signs of recovery in the June quarter as cloud computing revenue accelerated again and transactions through its e-commerce platforms looked healthy.
— CNBC’s Christine Wang contributed to this report.
