DJ Alibaba Changes Approach to Merchants Following Antitrust Fine -- ESG Insight

Commentary by Stela Zarija, research analyst, ESG & impact investing

After Alibaba was fined the equivalent of $2.8 billion last week for abusing its dominant position over rivals and merchants on its e-commerce platforms, the company announced Monday it would cut service fees and charges for vendors, as well as invest in improved tools for them. The Chinese antitrust regulator said Alibaba restricted merchants from doing business on rival platforms, forcing exclusivity on vendors, limiting competition and innovation. Despite the fine's record amount--equivalent of 4% of its domestic annual sales in 2019--Alibaba's chief executive said he didn't expect a material effect on business operations. Last month, the antitrust watchdog fined 12 Chinese tech companies for not reporting past investment deals properly and for not complying with antimonopoly laws.

Write to Stela Zarija at stela.zarija@dowjones.com

ESG Insights are written by The Wall Street Journal's ESG research analysts, whose commentary is independent of the news coverage by reporters at the Journal.

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April 12, 2021 11:17 ET (15:17 GMT)

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