Alibaba Group Holding Ltd. has received the endorsement of China’s antitrust authority over three years after a significant investigation into its online activities, indicating that Beijing is eager to show its support for the country’s major internet companies.
The State Administration for Market Regulation announced that Alibaba, China’s leading e-commerce company, has ended the monopolistic practices that triggered the investigation more than three years ago. The company has stopped imposing exclusive agreements on merchants, enhanced services for customers, and promoted competition among online platforms. Following this announcement, Alibaba’s shares rose over 4% in pre-market trading in New York.
This official endorsement comes amid increasing calls from Beijing for support of private companies and the technology sector, a sentiment that has grown stronger as China struggles to recover from a post-Covid economic downturn. Since 2023, government officials have indicated a more lenient approach toward the private sector compared to the stricter regulatory environment of 2020 and 2021, during which various agencies launched campaigns to curb the influence of China’s internet giants and their billionaire founders.
The antitrust regulator began its investigation into Alibaba in 2020 as part of a broader effort that eventually extended to industries including ride-hailing, online education, and e-commerce. Less than a year later, Alibaba was fined a record $2.8 billion for abusing its market dominance. On Friday, the antitrust agency praised Alibaba’s “effective results” from its three-year rectification process, which was required when the fine was imposed. The regulator also stated that it will continue to guide Alibaba, regulate its operations, and help improve its compliance.
“This marks a new beginning for Alibaba,” the company said in a statement. “Moving forward, we will continue to focus on innovation, adhere to compliance, increase investment in technology, support the healthy development of the platform economy, and create more value for society.”
However, the effects of the regulatory crackdown still linger. Funding for new startups has slowed as entrepreneurs and investors, wary of the severity of the campaign, shift their focus to areas like chipmaking and artificial intelligence that align with Beijing’s priorities. The previously dynamic industry has become more cautious about pursuing new growth opportunities to avoid attracting further regulatory attention.
The industry is also currently dealing with a decline in consumer spending. In a recent sign of concern for global markets about China’s economic health, Temu-owner PDD Holdings Inc. surprised investors on Monday with an unexpectedly bleak outlook. Both PDD—which gained popularity with its low-priced goods during China’s downturn—and Alibaba reported revenues that fell short of estimates.
