Alibaba Shares Jump After $2.8 Billion U.S. Anti-Monopoly Fine

Alibaba (NYSE:BABA) shares were up more than 6% in pre-market trading after the company was fined 18.23 billion yuan ($2.8 billion U.S.) by Chinese regulators following an anti-monopoly investigation.

Chinese regulators opened an anti-monopoly probe into Alibaba last December. The focus of the probe was around a practice that forces merchants to list their products on one of two e-commerce platforms, rather than choosing both.

China’s State Administration for Market Regulation (SAMR) said over the weekend that this practice stifles competition in China’s online retail market.

Alibaba said it does not expect a material impact on the company from the change of this exclusivity arrangement. Alibaba will introduce new measures to lower the entry barriers and costs for businesses and merchants on its platform.

China’s technology companies have grown into global giants over the past decade. But Beijing is becoming increasingly concerned by the power of these massive companies.

Regulatory scrutiny has focused on Alibaba founder Jack Ma’s empire after the billionaire made comments last October that appeared critical of China’s financial regulator. Regulators responded by pulling the plug on what would have been a record-setting initial public offering of Ant Group, the financial technology company that Ma founded.

In addition to the fine, which amounts to 4% of Alibaba’s 2019 revenue, regulators said Alibaba will have to file compliance reports to the SAMR for three years going forward.

In a note to clients, investment bank Morgan Stanley said: "Despite the record fine amount, we think this should lift a major overhang on BABA and shift the market’s focus back to fundamentals."