Chinese regulators said on Saturday they have fined Alibaba Group Holding Ltd a domestic record $2.75 billion for antitrust violations, amid an unprecedented regulatory crackdown on Jack Ma’s company and other technology conglomerates.
LIU XU, RESEARCHER AT THE NATIONAL STRATEGY INSTITUTE, TSINGHUA UNIVERSITY
“The $2.75 billion fine bill is not as big as we think – it’s almost a symbolic fine for Alibaba… The implications for the rest of China’s internet platforms are limited…
“A true enhancement of China’s antitrust efforts will depend on persistent determination from the central government and a more transparent, fair mechanism to help the antitrust forces to get rid of various kinds of interference during their investigations and enforcement.”
WU GE, DIRECTOR AT THE BEIJING ZHONGWEN LAW FIRM
“The fine indicates that internet platforms should also obey the laws and create real value for consumers – not just chase profits or make profitability their top priority.
“It should not be treated as a carnival for the public, as the fines will be eventually transferred to consumers…
“Government’s antitrust fines against major monopoly platforms will definitely not end here – rather it is a starting point. There will be more fines coming. It will be a trend in the near future.”
LOUIS TSE, WEALTHY SECURITIES MANAGING DIRECTOR, HONG KONG
“Ever since the Ant IPO was cancelled and with the antitrust laws in the pipeline, the market has expected that Alibaba would pay a price.
“I think it’s good for the share price now that the news has been delivered and it is cleared up at last. There has been weakness in China’s big tech stocks, and I think this fine will been seen a benchmark for any other penalties which could be applied to the other companies.”
HONG HAO, HEAD OF RESEARCH, BOCOM INTERNATIONAL, HONG KONG
“This penalty will be viewed as a closure to the antimonopoly case for now by the market. It’s indeed the highest profile antimonopoly case in China.
“The market has been anticipating some sort of penalty for some time … but people need to pay attention to the measures beyond the antimonopoly investigation, such as the divestment of media assets.”
MITCHELL KIM, INDEPENDENT TMT ANALYST, NEW YORK, WHO PUBLISHES IN THE SMARTKARMA PLATFORM
“I think it’s actually positive in that the share overhang will finally be lifted. Known downside is better than an unknown risk. The fine is record-setting but it is still less than 1% of Baba’s market cap.
“If it allows Alibaba to climb out of the hole, it’s worth it. I don’t think Alibaba’s power is significantly reduced by the elimination of exclusivity on merchants.”
YOU YUNTING, LAWYER WITH SHANGHAI DEBUND LAW OFFICES
“Alibaba and Tencent, two of China’s biggest tech giants, each have their own antitrust risk, namely abusing their market dominance status… What Alibaba did is to ask merchants to choose between itself and its competitors.
“It is much easier for regulators to collect evidence and make a case. So with the government’s antitrust determination in background, it’s easier to penalise Alibaba. Also the government needs a good example to show their determination on the antitrust front. The hefty fine also shows that.”
DICKIE WONG, KINGSTON SECURITIES EXECUTIVE DIRECTOR, HONG KONG
“It may not be a bad thing after all. Alibaba has been under the regulators’ spotlight since the derailment of the Ant Group IPO. In the short term the share price may face pressure. It will not only be Alibaba but also all other Chinese internet big guys, including Tencent, and the market will start to speculate which company will be the next target.”
LU MING, AEQUITAS RESEARCH ANALYST, SHANGHAI
“E-commerce platforms required its clients to sell products exclusively in their platforms and completely leave competitors. SAMR is eliminating the exclusive requirement. I think it has nothing to do with (Alibaba’s) government relation as Vipshop was just fined RMB3 million in February.
“Any impact on Alibaba’s share price will just be in the short term, it will not impact Alibaba’s value. I believe SAMR (State Administration for Market Regulation) will fine more e-commerce platforms, such as online car or property agencies.”
FRANCIS LUN, GEO SECURITIES CEO, HONG KONG
“What comes after Alibaba’s fine is the likelihood that there will be damage to China’s other internet giants.
“Their growth has been enormous and the government has turned a blind eye and allowed them to carry out uncompetitive practices. They can no longer do that, they will be able to have big market shares but they won’t be as dominant as they are right now.
“We could see a correction in Alibaba’s share price as a result of this fine, they will lose their monopoly and they will have to compete on a level playing field. The other tech stocks like Meituan will also suffer the same fate as well and we will see weakness across the tech sector.”
SHI JIANZHONG, ANTITRUST CONSULTANT COMMITTEE MEMBER OF THE STATE COUNCIL AND PROFESSOR OF CHINA UNIVERSITY OF POLITICAL SCIENCE AND LAW
“The fine bill is a milestone and road sign with great importance,” Shi Jianzhong wrote in state-backed Economic Times.
“It indicates that the antitrust law enforcement on internet platforms has entered a new era, and released clear policy signal.”