Beijing regulators are sending a message to Chinese internet giants.
Over the weekend, Chinese officials fined Alibaba a record $2.8 billion over antitrust violations. It was the biggest penalty yet as the Chinese government scrutinizes Jack Ma’s business empire — and it served as a warning for the country’s other internet giants. The fine was linked to Alibaba’s locking of merchants into its sales platform, according to the Chinese market authority, and vastly exceeds the agency’s previous largest fine, a $975 million antitrust penalty imposed on Qualcomm in 2015. A commentary published in the state-run People’s Daily minutes after the Alibaba announcement called such regulation “a kind of love and care.” The fine will likely curb Alibaba’s ambitions. Like its American counterparts, the company argued that its sheer size and wealth of services are a net positive for consumers. But smaller rivals are now likely to find support from Beijing if they accuse Alibaba of anticompetitive practices in the future. Shareholders appeared relieved. Alibaba’s shares rose by more than 6 percent in Hong Kong trading. Beyond the fine, the company agreed to stop violating antimonopoly rules and submit compliance reports for three years. And today, the company said it would lower the fees it charges merchants and provide additional services. Alibaba’s shares are still down sharply from late last year, when the antitrust rumblings began. Alibaba suggested that rivals could be next. “The penalty issued today served to alert and catalyze companies like ours,” the company said in its statement. “It reflects the regulators’ thoughtful and normative expectations toward our industry’s development.” Unlike Alibaba, shares in Tencent and Baidu were down today, as other big internet businesses in China feared that they might be next. An effort to unionize Amazon workers fails. Workers at a warehouse in Alabama overwhelmingly voted against the proposal, crushing one of the biggest drives to form a union in Amazon’s history. The lopsided result may prompt organized labor to try different tactics in the future. Jay Powell says the economy is at an “inflection point.” The Fed chair said on “60 Minutes” last night that the U.S. outlook had “brightened substantially” but warned that flare-ups in Covid-19 cases remain a risk. Speaking of virus risks: the South African variant may be able to evade some of the protection of the Pfizer-BioNTech vaccine. Microsoft may be close to striking another big acquisition. It is near a deal to buy Nuance Communications, the A.I. and speech recognition software company whose tech is tied to Apple’s Siri virtual assistant, Bloomberg reports.
