Alibaba completes three-year "rectification" following $2.75 billion fine, facing regulatory scrutiny

From Investing.com: 2024-09-02 00:30:29

China’s State Administration of Market Regulation announced that Alibaba has completed a three-year “rectification” following a $2.75 billion fine in 2021 for monopolistic practices, with the regulator commending the progress made by the e-commerce giant and promising ongoing guidance.

Alibaba faced record fines for abusing its market dominance since 2015, prompting reorganization and leadership changes amid heightened competition and regulatory scrutiny, with the company breaking up its business into six units and exploring potential listings for most of them.

Despite missing revenue estimates amid a consumer malaise in China, Alibaba reported April-June revenue growth of 3.9%, falling far short of the 30% growth from three years earlier, leading to a significant drop in stock value, down 72% since the announcement of anti-monopoly rules in November 2020.

Following a meeting chaired by President Xi Jinping, the Chinese government signaled an easing of the tech sector crackdown, vowing increased policy support for economic activity, including the platform economy, to counteract the impact of COVID-19 containment measures and stimulate growth.

Alibaba CEO Daniel Zhang announced his resignation from the cloud business, passing the reins to Eddie Yongming Wu, who also consolidated power by directly overseeing Alibaba’s domestic e-commerce division, a key area of focus for the company as it navigates competition and regulatory challenges.



Read more at Investing.com: Key events during China’s regulatory scrutiny of Alibaba By Reuters