Loading...
The Financial Express

Events leading up to China's $2.75b fine on Alibaba


Alibaba Group co-founder and executive chairman Jack Ma attends the World Artificial Intelligence Conference (WAIC) in Shanghai, China, September 17, 2018 — Reuters/Files Alibaba Group co-founder and executive chairman Jack Ma attends the World Artificial Intelligence Conference (WAIC) in Shanghai, China, September 17, 2018 — Reuters/Files

China slapped a record $2.75 billion antitrust fine on Alibaba Group Holding Ltd on Saturday, after regulators determined the e-commerce giant had abused its dominant market position for several years.

The Alibaba business empire has come under intense scrutiny in China since its billionaire founder Jack Ma’s stinging public criticism of the country’s regulatory system in October.

Following are key events leading up to the fine on Alibaba.

Oct 21, 2020: Ant Group, Alibaba’s fintech unit wins the final nod from China’s top securities watchdog to register its Shanghai initial public offering (IPO), clearing the last regulatory hurdle for what is shaping up as history’s biggest IPO.

Oct 24: Ant’s founder, billionaire Jack Ma, tells a public event attended by Chinese regulators that the nation’s financial and regulatory system stifles innovation and must be reformed to fuel growth. He compares the Basel Committee of global banking regulators to “an old man’s club”.

Oct 30: Retail investors bid for a record $3 trillion worth of shares in Ant’s dual listing, the equivalent of Britain’s annual economic output, betting on demand for Ant’s financial technology services in China.

Nov 2: Four of China’s top financial regulators say they conducted regulatory talks with Ma and Ant’s top two executives. They recommend tighter regulations for online micro-lending companies to help contain potential financial risks and rein in rising debt levels.

Nov 3: he Shanghai stock exchange suspends Ant’s IPO on its tech-focused STAR Market, citing the regulatory talks as a “material event” and a tougher regulatory environment as factors that may disqualify Ant from listing. The move prompts Ant to freeze the Hong Kong leg of the listing.

Nov 10: China increases scrutiny on e-commerce marketplaces and payment services belonging to the likes of Alibaba, publishing draft rules aimed at preventing monopolistic behaviour by internet platforms.

Nov. 23: China’s increasing oversight of internet platforms is “timely and necessary”, Alibaba CEO Daniel Zhang tells the World Internet Conference.

Dec 14: China imposes fines and announces probes into deals involving Alibaba and Tencent Holdings Ltd, telling internet giants it will not tolerate monopolistic practices and warning them to brace for tighter scrutiny.

Dec 24: Chinese regulators says they has launched an antitrust investigation into Alibaba and will summon Ant executives, with the ruling Communist Party mouthpiece warning against monopoly and expansion “in a disorderly and barbarian manner.”

Dec 27: China’s central bank says it has asked Ant to shake up its lending and other consumer finance business.

Jan 20, 2021: Ma makes his first public appearance in three months, speaking to a group of teachers. The video appearance eases concerns about his unusual absence from the limelight and sends Alibaba shares surging.

Feb 3: Ant agrees a restructuring plan with regulators under which it will become a financial holding company, says a person with direct knowledge of the matter.

Feb 4: Ant will hive off its consumer credit data operations, people with knowledge of the matter tell Reuters, a concession to regulators that could help get the massive IPO back on track.

Feb 7: China’s market regulator releases new anti-monopoly guidelines targeting internet platforms, further tightening restrictions on the country’s tech giants.

March 2: Ant is working on measures to help staff with “short-term liquidity problems”, internal staff messages from executive chairman Eric Jing show, after the IPO suspension dashed employees’ hopes of cashing in their shares.

March 12: Ant CEO Simon Hu unexpectedly resigns, the first top management exit since the scuppered $37 billion IPO.

March 18: Chinese regulators say they have Alibaba, Tencent, TikTok owner ByteDance and nine other technology companies for talks on use of “deepfake” technologies on their content platforms, stepping up scrutiny of the sector.

April 10: Regulators say they have fined Alibaba $2.75 billion for violating anti-monopoly rules and abusing its dominant market position, China’s highest antitrust fine ever.

Share if you like

-->