Why Alibaba is under antitrust investigation

Suspected of monopoly. In December 2020, the State Administration for Market Regulation (SAMR) opened an investigation under the Anti-Monopoly Law against Alibaba Group Holdings**** (hereinafter referred to as Alibaba Group) for abusing its dominant market position in China's online retail platform service market.

The State Administration for Market Regulation set up a special task force to conduct on-site inspections of Alibaba Group on the basis of solid preliminary work, investigate and question relevant personnel, consult and copy relevant documents and materials, and obtain a large number of evidence materials. Conduct extensive investigation and evidence collection on other competitive platforms and merchants within the platform;

Conduct in-depth verification and big data analysis of the evidence materials in this case; Organize experts to repeatedly carry out in-depth case analysis and argumentation; Listen to Alibaba Group's statements and opinions on many occasions to protect its legitimate rights. The facts of this case are clear, the evidence is conclusive, the characterization is accurate, the handling is appropriate, the formalities are complete, and the procedures are lawful.

According to the investigation, Alibaba Group has a dominant position in the online retail platform service market in China.

Since 2015, Alibaba Group has abused its dominant market position by imposing a "either-or" requirement on merchants on the platform, prohibiting merchants on the platform from opening stores or participating in first-class activities on other competitive platforms, and taking a variety of incentives and punishments to ensure the implementation of the "either-or" requirement with the help of market forces, platform rules, data, algorithms and other technical means, so as to maintain and enhance its own market power and obtain unfair competitive advantages.

According to the investigation, Alibaba Group's "either-or" behavior eliminates and restricts competition in China's online retail platform service market, and hinders the free flow of goods, services and resource elements.

It affects the innovation and development of the platform economy, infringes on the legitimate rights and interests of merchants on the platform, and harms the interests of consumers, and constitutes an abuse of market dominance that prohibits "restricting trading counterparties to only trade with them without justifiable reasons" prohibited by Article 17, Paragraph 1, Item (4) of the Anti-Monopoly Law.

In accordance with Articles 47 and 49 of the Anti-Monopoly Law, and taking into account factors such as the nature, extent and duration of Alibaba Group's illegal acts, on April 10, 2021, the State Administration for Market Regulation made an administrative penalty decision in accordance with the law, ordering Alibaba Group to cease its illegal acts and imposing a fine of 4% of its 2019 domestic sales of 100 million yuan, totaling 100 million yuan.

At the same time, in accordance with the principle of combining punishment and education in accordance with the Administrative Punishment Law, Alibaba Group issued an Administrative Guidance, requiring it to carry out comprehensive rectification in terms of strictly implementing the main responsibilities of platform enterprises, strengthening internal control and compliance management, maintaining fair competition, and protecting the legitimate rights and interests of merchants and consumers on the platform, and submitting self-inspection and compliance reports to the State Administration for Market Regulation for three consecutive years.

Alibaba was investigated by the anti-monopoly because of the implementation of "either-or".

On the morning of December 24, 2020, the State Administration for Market Regulation announced that the State Administration for Market Regulation filed a case for investigation into suspected monopolistic behaviors such as "choosing one of two" by Alibaba Group Holdings in accordance with the law based on the report.

At the same time, when the people talked about the investigation of Alibaba, they said that the investigation did not mean that the country's attitude towards the encouragement and support of the platform economy had changed, but that it was to better regulate and develop the platform economy and guide and promote its healthy development.

To put it simply, Jack Ma has monopolized resources, and such behavior is very harmful to the economy.

The main reason for Ali to be filed is that it involves a two-choice incident, according to Ali once said that this behavior is a normal market competition, and from the perspective of consumers, such behavior obviously belongs to the feeling of industry monopoly.

First of all: resource monopoly behavior will bring the illusion of preferential treatment to consumers in the early stage. Secondly:

After the monopolistic behavior is completed, consumers will pay a high price for the consumption behavior they have become accustomed to. And finally: the actual harm after the formation of a monopoly is very great.

Conclusion: Resource monopoly will cause a large number of people to lose their jobs, market consumption is sluggish and other adverse reactions, such behavior should be stopped.

Jack Ma has a monopoly on a lot of payment software and mobile games, for example, many payment software can only use Alipay for mobile payment, and some payments for mobile games can only be made through Alipay.

Jack Ma has a monopoly on a lot of finance, that's why such a thing happens, and such a monopoly is absolutely not allowed to happen in China.

In fact, it is a monopoly on the mode of selling goods, in the past, a merchant could sell goods on several platforms, but Alibaba required that only one could be selected.

Monopoly on the means of electronic payment. It was investigated on suspicion of not allowing the payment methods of its competitors to seize its own market.

First, Tmall monopolizes online shopping, second, Ant Financial monopolizes online lending business, and third, the community monopolizes the market for small traders.

In the past few weeks, there have been rumors that Ali will be investigated by the state for his either-or behavior. On December 26, 20, the state officially announced that it would investigate and collect evidence for Alibaba Group's monopolistic behavior.

With the spread of this news, Alibaba Group's share price is also **13%, and the market value has evaporated as high as 300 billion yuan! This undoubtedly has a far-reaching impact on Alibaba's business philosophy and backup layout.

AutoNavi Map, **, Tmall, UC Browser, Alipay, Hema Fresh, RT-Mart, Yintai and other national APPs and supermarket physical stores are all subsidiaries of Alibaba Group. It can be said that almost all Chinese have used Ali's products, and our lives are basically inseparable from Ali's circle. Before you know it, you've become a behemoth.

And this process has actually constituted a monopoly, and in today's Chinese Internet era, Alibaba and Tencent are the two giants. Undoubtedly, it is an obstacle for emerging Internet technology companies to expand their scale, and if they want to succeed, they must greet them well.

This is detrimental to both the market and the economy, and when the class is solidified for a long time, people lose the meaning of hard work. Therefore, the state's handling of the giants' monopoly of the market and malicious price hikes will also be serious and serious.

Because China has always been a socialist country, the people are the masters of the country, and the interests of the people are always above everything else, not capital controls the society!

Therefore, to sum up, the state is not alone in this investigation of Alibaba, and it is very likely that other Internet giants will be investigated in the future. The purpose is to reduce the monopoly of the Internet and reduce the pressure on emerging startups. Let the people benefit from the benefits of the people, instead of accepting the so-called giant rule and oppression!

Legal Analysis: The State Administration for Market Regulation imposed an administrative penalty on Alibaba Group for abusing its dominant market position in accordance with the law, and imposed a fine of 4% of its 2019 sales amounting to 100 million yuan.

Legal basis: Article 17 of the Anti-Monopoly Law of the People's Republic of China.

Business operators with a dominant market position are prohibited from engaging in the following acts of abusing a dominant market position:

1) Selling goods at an unfairly high price or purchasing goods at an unfairly low price;

2) Selling goods at a price lower than the cost without justifiable reasons;

3) Refusing to trade with a trading counterparty without a legitimate reason;

4) Restricting trading counterparties to only conduct transactions with them or with designated business operators without legitimate reasons;

5) Tie in the sale of commodities without justifiable reasons, or attach other unreasonable trading conditions to the transaction;

6) Without justifiable reasons, differential treatment is carried out on transaction conditions such as transaction conditions for trading counterparties with the same conditions;

7) Other abuses of market dominance as determined by anti-monopoly law enforcement agencies.

"Dominant market position" as used in this Law refers to a market position in which a business operator has the ability to control the goods, quantity or other trading conditions in the relevant market, or to hinder or influence the ability of other business operators to enter the relevant market.

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Alipay (China) Network Technology is a third-party payment platform in China, committed to providing "simple, safe and fast" payment solutions. Since its establishment in 2004, Alipay has always taken "trust" as the core of its products and services. It has two independent brands, "Alipay" and "Alipay Wallet".

Since the second quarter of 2014, it has become the world's largest mobile payment manufacturer.

By the end of 2013, the number of Alipay real-name authentication users exceeded 300 million. In 2013, Alipay's single-day transactions peaked at 100 million. Among them, the peak number of mobile payment transactions in a single day reached 45.18 million, and the peak transaction volume of mobile payment reached 11.3 billion yuan.