Xi Jinping is very different from his predecessors and instead of following on the path of prosperity that Deng Xiaoping set in, he has the intention of becoming the modern Mao. The final nail in Alibaba’s coffin has been struck and by fining e-commerce company Alibaba with a fine of 18.2bn yuan (US$2.78bn), Xi Jinping has made sure that no competition to its authority arises. However, it also brings an end to the façade of China being a market and business-friendly country.
When China’s antitrust regulator revealed on Saturday that it had slapped a fine of 18.2 billion yuan ($2.8 billion) on the Hangzhou-based tech giant, it became the country’s highest-ever antitrust fine. The fine is equal to approximately 4% of Alibaba’s domestic sales in 2019. Alibaba had exploited its market supremacy, according to China’s State Administration for Market Regulation (SAMR). Alibaba has been targeting merchants who use rivals’ platforms since 2015, a tactic known as “er xuan yi,” which translates to “choose one out of two.” Or at least these are the claim by China’s agencies.
However, the fact that the Chinese Communist Party has practised a brutal crack-down on all the facets of Jack Ma’s company means that Xi Jinping was scared of the rise of Jack Ma as a personality and the Alibaba group as an organisation. During several meetings dating back to last year, Beijing expressed concerns about Alibaba’s media assets, according to the source, who asked not to be named because the discussions were private. The company’s dominance over social media in China as well as its involvement in an online controversy involving one of its executives, has enraged the CCP.
Alibaba’s co-founder Jack Ma has been a subject of a crackdown that started last year and has threatened the e-commerce giant and its finance subsidiary Ant Group Co. The Chinese government has asked Alibaba to sell its media assets, according to the Wall Street Journal. After a controversy involving Jiang Fan, the e-commerce company’s youngest partner at the time, Bloomberg News reported in February that Beijing was worried about Alibaba’s media holdings. Posts about the controversy started to vanish from social media sites, including Weibo, provoking the wrath of the Chinese government officials.
Read more: After destroying Jack Ma’s Ant Group, CCP begins to crack down on Ma’s media empire
Alibaba and other major Chinese tech companies have come under fire as consumer concerns about their influence in China have grown. Since October 2020, Alibaba has been under investigation. After Chinese regulators expressed increasing concern about Alibaba’s financial arm, Ant Group, expanding into loans, asset management, and insurance, its co-founder, Jack Ma, chastised them as being behind the times.
Many other companies including Tencent have come under the intense scrutiny of the Chinese Communist Party and its agencies. In the name of the anti-corruption measure, they are trying to axe these big companies just to satisfy the vulnerability of Xi Jinping. And in line with this, Xi Jinping has put a final nail in the coffin of Alibaba by fining it for $2750000000.