CHINA’S State Administration for Market Regulation (SAMR) has slapped a fine of 18.23 billion yuan (US$2.78 billion) on Alibaba Group for indulging in a monopolistic act of abusing its dominant market position.

The SAMR said in a notice Saturday that it had made an administrative penalty decision under China’s anti-monopoly law, ordering Alibaba Group to stop illegal activities and imposing a fine of 4 percent on its 2019 domestic sales of 455.71 billion yuan, totaling 18.23 billion yuan.

The market regulator concluded from a four-month investigation that Alibaba has been abusing its market dominance since 2015 by prohibiting merchants from opening stores or participating in promotional activities on other competitive platforms.

The SAMR said that Alibaba’s “pick one out of two” requirement restricted competition among online retail platforms and infringed on the legitimate rights of the merchants, at the same time, hurt consumers’ interest.

“Alibaba accepts the penalty with sincerity and will ensure its compliance with determination,” the company responded in a statement Saturday. It pledged to strengthen its operations in accordance with the law, step up the building of a compliance system and better fulfill its social responsibilities.

It also vows to introduce a series of measures to lower platform operating thresholds and reduce platform operating costs to create a more transparent and efficient platform environment for businesses.

Since its founding in 1999, Alibaba has morphed into one of the world’s largest e-commerce companies. The company’s 2014 listing on the New York Stock Exchange was then the biggest stock offering in world history.

“The fine bill marking the antitrust law enforcement on Internet platforms has entered a new era, and released a clear policy signal,” wrote Shi Jianzhong, professor at China University of Political Science and Law.

“Enforcement of the antitrust law is also a way to educate the sector,” said Liu Ying, research fellow of Chongyang Institute for Financial Studies at Renmin University of China, who has written extensively on China’s platform economy.

Liu dismissed the idea of “the freedom of contract signing” between merchants and platforms in this case, shrugging off the theory of “voluntary” signing on exclusive transactions. (CGTN)