Chinese regulators have confirmed that Alibaba has successfully completed its "correction" process.
Last weekend, Chine's market regulator announced that Alibaba finished its three-year regulatory "correction" following a $2.6 billion fine in 2021 for monopoly practices. After this news, Alibaba's stock rose by nearly 3%.
On Friday, the State Administration for Market Regulation (SAMR) said they had been monitoring Alibaba's compliance with anti-monopoly rules. They stated that the "correction" had achieved "good results."
In 2021, SAMR fined Alibaba 18.23 billion yuan ($2.6 billion) for forcing merchants to choose between two e-commerce platforms, which gave Alibaba an unfair advantage. Since then, SAMR has ensured Alibaba followed the rules. Now, Alibaba has stopped this monopolistic practice, according to SAMR.
SAMR also plans to guide Alibaba in improving its compliance and innovation. Completing this regulatory process will help Alibaba improve its relationship with the goverment. Analysts from Jefferies noted that this is a "positive point" for the company, marking a "new beginning."
The announcement might also indicate a softer approach from Chinese regulators towards private tech companies after strict regulations began in late 2020. Back then, Beijing introduced rules to limit tech companies' power in areas like anti-monopoly and gaming.
Jack Ma's empire has been under scrutiny since regulators canceled the IPO of Ant Group, a financial tech company, in 2020. Ant Group has also undergone regulatory adjustments, resolving most issues last year.
Regulatory concerns have heavily impacted Alibaba's stock, which has fallen over 70% from its peak 2020. Recently, the company faced slow growth due to increased competition in China's e-commerce sector and cautious consumers.
However, Alibaba showed signs of recovery in the second quarter, with cloud computing revenue and positive trends in e-commerce transactions.
Source: CNBC
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