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Friday, March 1, 2024

Highest ever Antitrust fine in China


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Jack Ma, Co-founder of Alibaba fined $2.8 Billion a month after he questioned regulatory authorities. Jack Ma’s business has been facing scrutiny particularly after he criticized China’s regulatory system back on October 24th, 2020 while speaking at a banking conference addressing bankers and regulators as being outdated. He also accused the Chinese government of not letting companies grow then came the launch of the antitrust probe on Alibaba and he disappeared from the public eye as the regulators cracked down on his finances.

The disappearance of Jack Ma was highly questionable when he did not appear for a show that he created ‘Shark Tank’ on 14th November 2020 for the Grand Finale.

After it started to trend on Twitter ‘where is jack ma?’ Chinese communist party’s official new portal People’s Daily published news which only said that Jack Ma is embracing Supervision. This story was deleted within few hours. Some reports also said he was under detention.

Sources close to Jack Ma say that he did not disappear but is laying low as his Empire is under a lot of pressure from the Chinese regulators. In China, its communism before capitalism, and Jack Ma is a figure of a capitalist. When Alibaba IPOd in New York Jack Ma said he would never do business with the Chinese government ‘You love them but you never marry them’ there have been resentments towards Jack Ma over his comments.

On December 24th, 2020 China’s law enforcement agency investigated Alibaba Group and is said to have concluded their investigation in one day however the European Union took over 10 years to investigate the google-android monopoly.

China launched an investigation into the country’s biggest Tech Company Alibaba for suspected monopolistic behavior. A meeting held between the Chinese officials and ANT Group to implement financial supervision, fair competition, and protect legitimate rights and interests of consumers. Reports suggest that since 2015, Alibaba Group has abused its power and dominance by imposing requirements on merchants on its platform, forcing merchants to do promotions and open stores on its platform, adopted various incentives, penalties, platform rules, and tech needs to ensure the requirement is implemented to enhance its market dominance and gain unfair competitive advantage.

In Covid times when economies had dropped the Chinese President Xi Jinping halted ANT’s IPO. Jack Ma’s Fintech Company was going to raise funds for the world’s biggest IPO on the Shanghai stock exchange. This was not a small IPO but $34 Billion dollars. Xi Jinping decided to pull the plug on ANT groups $37 billion IPO, the wall street journal reported citing Chinese officials with the knowledge of the matter

 What is Jack Ma’s ANT group and how does it make money?

ANT group operates China’s massive e-payments system Alipay which has over 1 billion users. Billionaire Jack Ma co-founder of Alibaba Group controls ANT group with 50.52% of its shares but besides being a massive e-payment system what is ANT group? Fintech has a giant financial ecosystem including China’s largest online insurance service. It takes only 3 minutes on Alipay to get a loan with zero human intervention.

Fine imposed is equivalent to around 4% of Alibaba’s revenues in 2019, which is the highest ever antitrust penalty to be imposed in China.

Many feel that speaking out of turn against the Chinese government has cost Jack Ma, by halting ANTs IPO the Chinese government might be sending out a message to all the business owners and billionaires warning them of the consequences of speaking against the communist party and the fact that he lies low for his comments against the government is not a good sign for his vast business empire.

After months of speculation over Jack Ma’s disappearance, the Chinese tycoon was spotted playing golf at Sun Valley Golf Resort in Hainan. It is said to be the first sitting of him after his live-streamed video call interaction with rural educators in January 2020.

It was also seen that Jack ma has not been included in the list of Nations Entrepreneurial Leaders published by state media.

What could be the effect on us?

Well DATA PRIVACY. We have seen how our Indian government has banned so many Chinese applications due to a lot of disturbances going on since last year with china and Data leaking. China reportedly demanded that big Chinese Tech companies like Alibaba process stolen US data for the nation’s top spies upon request.

Jack Ma is not the only one to face the communist party’s wrath, a real estate mogul called Xi Jinping a ‘Clown’ and said the ‘Covid crisis’ was not being handled properly. He disappeared for some time and then later it was reported that he had been jailed for 18 years. Similarly, a lot of reporters have been missing in China during this Covid time.

It may be noted that Jack Ma stepped down as Alibaba CEO in 2019 but he is part of the company’s partnership, which includes a 36-member group that has the right to nominate a majority of its board of directors. Ma is one of the biggest shareholders of the Alibaba Group.

[author title=”Shefali Kochhar,” image=”http://goachronicle.com/wp-content/uploads/2021/04/Screenshot_20210321-160233_LinkedIn.jpg”]Intern, Goa Chronicle . I am an entrepreneur who has tried her hands on various ventures like Electric Vehicle Charging Station , Online Retail Store / Trading and few more ventures. I have done my entrepreneurship from Amity University Noida.[/author]

DISCLAIMER: This article reflects author’s view point. Goa Chronicle may or may not subscribe to views of the author

Shefali Kochhar
Shefali Kochhar
From politics to startups 'Reflecting light on issues that go unspoken about'

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