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Earlier this month, China's State Administration for Market Regulation issued the largest fine ($2.8 billion) ever levied against any corporation worldwide, against online retailer Alibaba.
That was just the first move in a dramatic week.
A thread: https://contention.substack.com/p/markets-beat-forecasts-workers-into
That was just the first move in a dramatic week.
A thread: https://contention.substack.com/p/markets-beat-forecasts-workers-into
The fine was just the beginning.
Next, Alibaba CEO Daniel Zhang announced a sweeping set of cost and policy reforms meant to help independent merchants previously squeezed by the company's monopoly practices. https://www.wsj.com/articles/alibaba-hit-by-antitrust-fine-vows-to-help-vendors-with-fee-cuts-11618199634
Next, Alibaba CEO Daniel Zhang announced a sweeping set of cost and policy reforms meant to help independent merchants previously squeezed by the company's monopoly practices. https://www.wsj.com/articles/alibaba-hit-by-antitrust-fine-vows-to-help-vendors-with-fee-cuts-11618199634
This is precisely what Alibaba was doing.
Note the cost of these reforms will come out of profits, not increased prices for customers.
Note the cost of these reforms will come out of profits, not increased prices for customers.
Monday also saw the announcement that Alibaba’s fintech arm Ant Group would overhaul its business model from a loosely-regulated payment and online lending platform to a holding company essentially regulated like a bank. https://www.wsj.com/articles/ant-group-to-become-a-financial-holding-company-overseen-by-central-bank-11618223482
The next day, SAMR brought together 34 of China's largest tech platforms to warn them that they had one month to check whether they're in compliance with anti-monopoly, consumer protection, and tax laws or face "severe consequences." https://www.caixinglobal.com/2021-04-13/beijing-to-big-tech-stop-breaking-the-law-within-one-month-or-else-101690720.html
By the end of the week, all 34 had issued public pledges to help regulators "maintain market order." This is in line with the Communist Party's focus on containing "the disorderly expansion of capital." https://www.scmp.com/tech/big-tech/article/3129792/china-antitrust-alibaba-promises-assist-regulators-maintain-market
What's remarkable, however, is how unthinkable any of this would be in the United States.
Here's why:
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