{"id":120779,"date":"2021-04-12T03:50:59","date_gmt":"2021-04-12T03:50:59","guid":{"rendered":"https:\/\/precoinnews.com\/?p=120779"},"modified":"2021-04-12T03:50:59","modified_gmt":"2021-04-12T03:50:59","slug":"alibaba-says-does-not-expect-material-impact-from-antitrust-fine-shares-rally","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/alibaba-says-does-not-expect-material-impact-from-antitrust-fine-shares-rally\/","title":{"rendered":"Alibaba says does not expect material impact from antitrust fine, shares rally"},"content":{"rendered":"<p>SHANGHAI (Reuters) -China\u2019s Alibaba does not expect any material impact from changes to its exclusivity arrangements with merchants, CEO Daniel Zhang said on Monday, after regulators fined the e-commerce giant a record $2.75 billion for abusing its market dominance.<\/p><figcaption>FILE PHOTO: The signage is seen at Alibaba Group headquarters during the company&#8217;s 11.11 Singles&#8217; Day global shopping festival in Hangzhou, Zhejiang province, China, November 11, 2020. REUTERS\/Aly Song<\/figcaption><p>Shares in Alibaba Group Holdings Ltd rose as much as 9% in Hong Kong trade as a key source of uncertainty for the company was removed, and on relief the fine and steps ordered were not more onerous.<\/p>\n<p>Alibaba has come under intense scrutiny since billionaire founder Jack Ma\u2019s public criticism of the Chinese regulatory system in October.<\/p>\n<p>The company will introduce measures to lower entry barriers and business costs faced by merchants on its platforms, Zhang told an online conference for media and analysts.<\/p>\n<p>Alibaba executives said despite Saturday\u2019s record 18 billion yuan ($2.75 billion) fine and measures ordered by regulators, they remain confident in the government\u2019s overall support of the company.<\/p>\n<p>\u201cThey are affirming our business model,\u201d said Alibaba executive vice chairman Joe Tsai. \u201cWe feel comfortable that there\u2019s nothing wrong with our fundamental business model as a platform company.\u201d<\/p>\n<h2>SHARES BOUNCE<\/h2>\n<p>Markets reacted positively, with shares jumping by the most since July last year.<\/p>\n<p>\u201cNow the penalty is determined, the market\u2019s uncertainty about Alibaba will be reduced,\u201d Everbright Sun Hung Kai analyst Kenny Ng said. \u201cAlibaba\u2019s stock price has lagged behind the overall emerging economy stocks for some time in the past. The implementation of this penalty is expected to allow Alibaba\u2019s stock price to regain market attention.\u201d<\/p>\n<p>Aside from imposing the fine, among the highest ever antitrust penalties globally, the State Administration for Market Regulation (SAMR) ordered Alibaba to make \u201cthorough rectifications\u201d to strengthen internal compliance and protect consumer rights.<\/p>\n<p>\u201cThe required corrective measures will likely limit Alibaba\u2019s revenue growth as a further expansion in market share will be constrained,\u201d said Lina Choi, Senior Vice President at Moody\u2019s Investors Service. \u201cInvestments to retain merchants and upgrade products and services will also reduce its profit margins.\u201d<\/p>\n<p>SAMR said it had determined Alibaba, which is also listed in New York, had prevented its merchants from using other online e-commerce platforms since 2015.<\/p>\n<p>The practice, which the SAMR has previously spelt out as illegal, violates China\u2019s antimonopoly law by hindering the free circulation of goods and infringing on the business interests of merchants, the regulator said.<\/p>\n<p>The probe comes as China bolsters SAMR with extra staff and a wider jurisdiction amid a crackdown on technology conglomerates, signalling a new era after years of laissez-faire approach.<\/p>\n<p>The agency has taken aim recently at China\u2019s large tech giants in particular, mirroring increased scrutiny of the sector in the United States and Europe.<\/p>\n<h2>EXCLUSIVITY ISSUES<\/h2>\n<p>Alibaba said it accepted the penalty and \u201cwill ensure its compliance with determination\u201d.<\/p>\n<p>Speaking with analysts on Monday, Tsai said the company \u201cdoesn\u2019t rely on exclusivity\u201d to retain its merchants, adding such exclusivity arrangements in the past only covered a small number of Tmall flagship stores.<\/p>\n<p>Alibaba and its peers remain under review for mergers and acquisitions from the market regulator, Tsai told the briefing, adding he was not aware of any other anti-monopoly-related investigations.<\/p>\n<p>The fine is more than double the $975 million paid in China by Qualcomm, the world\u2019s biggest supplier of mobile phone chips, in 2015 for anticompetitive practices.<\/p>\n<p>($1 = 6.5522 Chinese yuan)<\/p>\n<p>Source: <a href=\"https:\/\/www.reuters.com\/article\/us-china-alibaba\/alibaba-says-does-not-expect-material-impact-from-antitrust-fine-shares-rally-idUSKBN2BZ01P\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>SHANGHAI (Reuters) -China\u2019s Alibaba does not expect<\/p>\n","protected":false},"author":3,"featured_media":120778,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23054],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - 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