Alibaba's office building is seen in Nanjing, Jiangsu province, China, August 28, 2024.
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alibaba China's market regulator said on Friday it had completed a three-year regulatory “rectification” process following an antitrust fine it received for monopolistic practices in 2021.
Alibaba shares rose about 3% in afternoon trading Friday.
China’s State Administration for Market Regulation said on Friday it has been overseeing Alibaba’s compliance with antitrust rules for the past few years, saying the rectification work has achieved “good results,” according to a statement translated by Google.
In 2021, China’s regulator fined Alibaba 18.23 billion yuan ($2.6 billion) as part of an antitrust investigation into the tech giant. The regulator focused on a practice that forced merchants to choose one of two e-commerce platforms, rather than being able to work with both.
The regulator said at the time that the “one choice” policy and others allowed Alibaba to consolidate its market position and gain unfair competitive advantages.
Since the fine, the FTC has been supervising Alibaba as it complies with the regulator’s requirements. The FTC said on Friday that Alibaba has now completed that process and stopped its “pick-one-out-of-two” monopolistic behavior.
The administration said it will now direct Alibaba to continue improving its compliance and efficiency and accelerating innovation.
Completing the regulatory overhaul would help put one of Alibaba’s worst run-ins with Beijing behind it. Jefferies analysts said in a note on Friday that the regulatory process was “positive” for the company, “highlighting that this is a fresh start and ensuring compliance in operations.”
But the regulator’s announcement may also signal a continued softening of Chinese regulators toward private tech companies, following a crackdown that began in late 2020. At the time, Beijing issued a series of regulations and moves aimed at constraining the power of domestic tech companies in areas ranging from antitrust to gaming.
Alibaba founder Jack Ma’s empire has been in the spotlight over the past few years since regulators halted the initial public offering of his fintech company Ant Group in 2020. Ant Group itself has also undergone a regulatory overhaul, with most of the major issues resolved by last year.
Regulatory concerns have weighed on Alibaba’s shares, which are down more than 70% from their peak in 2020. More recently, the company has been dealing with slowing growth amid increasing competition in China’s e-commerce space, as well as a cautious Chinese consumer.
The tech giant showed early signs of recovery in the second quarter, as cloud computing revenue accelerated and transactions across its e-commerce platforms looked healthy.
— CNBC's Christine Wang contributed to this report.
