The signage is on November 11, 2020 at the company’s headquarters on November 11. Singles’ Day in Hangzhou, Zhejiang Province, China, at the Alibaba Group’s headquarters.
Aly Song | Reuters
GUANGZHOU, China – Alibaba shares rose 6% in US premarket trading after the company fined 18.23 billion yuan ($ 2.8 billion) of an anti-monopoly investigation by Chinese regulators had been occupied.
Alibaba’s Hong Kong-listed shares closed 6.5% higher on Monday.
“Despite the record fine, we should remove a large overhang at BABA and shift the focus of the market back to fundamentals,” Morgan Stanley wrote in a note on Sunday, one day after the fine was waived.
Chinese regulators opened an antimonopoly investigation against Alibaba in December. The main focus has been on a practice that forces merchants to list their products on one of two ecommerce platforms rather than selecting both.
China’s State Administration for Market Regulation (SAMR) said on Saturday that the practice suppressed competition in China’s online retail market and “violates the traders’ operations on the platforms and the legitimate rights and interests of consumers.”
Daniel Zhang, CEO of Alibaba, said he does not expect the change to this exclusivity agreement to have a material impact on the company.
Zhang also said Alibaba will introduce new measures to lower barriers to entry and costs for businesses and merchants on the platform. The company will continue to expand into smaller Chinese cities and rural areas, added the CEO.
China’s technology companies have grown into giants largely without a care in the world. However, Beijing is increasingly concerned about the power of these companies.
We are happy that we can leave this matter behind.
Executive Vice Chairman, Alibaba
Regulatory scrutiny has focused on Alibaba founder Jack Ma’s empire after the billionaire made some comments in October that were critical of China’s financial regulators.
Not long after that, regulators pulled the plug on a record-breaking IPO for the Ant Group, founded by financial technology giant Ma.
Alibaba’s vice chairman Joe Tsai said Monday he was unaware of any further investigations into the antimonopoly law.
“We are happy that we can put this matter behind us,” said Tsai.
However, Tsai said that Alibaba and its colleagues are being questioned by regulators about mergers, acquisitions and strategic investments as part of a screening process.
In addition to the fine, which represents around 4% of the company’s 2019 sales, regulators are required to file Alibaba self-assessment and compliance reports with the SAMR for three years.
– CNBC’s Christine Wang contributed to this report.