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Alibaba Group Holding Ltd. has successfully concluded a three-year regulatory overhaul, following the comprehensive rectification measures enforced after receiving an antitrust fine from China’s State Administration for Market Regulation (SAMR) in 2021. As a result, Alibaba’s shares saw an upward movement, rising more than 3% in Friday morning trading.
In 2021, Alibaba faced a significant regulatory action when SAMR imposed a fine of 18.23 billion yuan ($2.6 billion), citing monopolistic practices notably the “choose one” policy that restricted merchants from engaging with multiple e-commerce platforms. This policy, according to SAMR, unfairly strengthened Alibaba’s market dominance.
Since the imposition of the fine, SAMR has closely monitored Alibaba’s efforts to align its operations with antitrust regulations. The regulatory body has now confirmed that Alibaba has fully adhered to the required adjustments, effectively abandoning the monopolistic behaviors identified in the investigation.
“Alibaba has completed all rectification work as stipulated by SAMR, achieving satisfactory results,” stated a representative from SAMR. “We will continue to guide Alibaba to enhance compliance, improve operational efficiency, and foster innovation in their business practices.”
This milestone marks a significant turn for Alibaba, positioning the company for a new phase of compliant operations and growth. Analysts from Jefferies have identified this conclusion as a pivotal moment for Alibaba, suggesting a fresh start that guarantees compliance and operational transparency.
This regulatory resolution comes amidst a broader recalibration of Chinese regulatory approaches toward the tech sector, following extensive measures initiated in late 2020 aimed at curtailing the unchecked expansion of tech giants.
Alibaba’s recovery signals are promising, with notable improvements in its cloud computing revenue and e-commerce transactions. These developments are critical as the company navigates a competitive e-commerce landscape and engages with a more prudent Chinese consumer base.
The successful conclusion of Alibaba’s rectification process not only enhances its regulatory standing but also reinstates confidence among investors and stakeholders, promising a stable path forward for the tech conglomerate.
