Apr 30, 2021 (China Knowledge) - Alibaba Group Holdings (9988) was recently hit by a USD 2.8 bln fine, with Tencent (0700) following suit. This momentum in antimonopoly crackdowns might lead to slower business growth from hereon, with 33 platform operators given two weeks to address similar concerns in their operations.
Alibaba has a wide range of interlinked services and have been using these advantages to outmuscle their competitors. With this antimonopoly crackdown, it would hinder their current practice as well as competitive advantage. Governments will allow these companies to grow their core businesses, but practices such as mandated exclusive contracts and unfair surcharges would be heavily scrutinized by the officials.
The fine would set an example for smaller players like JD.com (JD) (9618) and Pinduoduo (PDD) to dissuade them from following the footsteps of Alibaba.
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