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A record fine, public penitence from a tech giant and a ‘who’s who’ of digital firms warned to “rectify” their ambitions within a month — state regulators are showing no one is bigger than Beijing in Xi Jinping’s China.

E-commerce titan Alibaba absorbed the massive $2.78 billion penalty from China’s market watchdog last Saturday, after a months-long investigation found it had been abusing its dominant market position.

Analysts say the chastening was part of Beijing’s plan to force a diet on tech giants — from Alibaba to Tencent to Baidu — who have grown fat on the data and personal finances of the Chinese public.

After being hit with China’s biggest ever corporate fine — the equivalent of four percent of annual sales — Alibaba said it would “fully comply” and drop an exclusivity clause to allow merchants to also sell their goods on rival e-commerce platforms.

Vice chair Joe Tsai thanked the State Administration for Market Regulation for “good guidance on some of the specific issues under the anti-monopoly law.”

Alibaba, which started as an e-commerce platform, spun out fintech colossus Ant Group, China’s biggest online payments firm — leaving China’s regulators struggling to keep up with a marketplace making and meeting new digital lifestyles.

It hit choppy waters after co-founder Jack Ma publicly criticised Chinese regulators in October over their warnings about the expansion of Ant.

In response, regulators pulled Ant’s planned record-busting 35-billion-dollar IPO and ordered a restructure of the company, decoupling the “inappropriate links” to other financial products.

It is now being forced to transform into a financial holding company under the oversight of the central bank, welding it to banking rules.

Ant must pivot to values “serving the real economy and the masses,” state mouthpiece the Global Times said, citing the regulators.

The restructure “is designed to level the playing field between Ant and other fintech,” said Angela Zhang, a law academic at the University of Hong Kong.

“Ant’s major competitive advantage lies in the troves of data it obtained through Alipay,” she said, citing the ubiquitous online payments platform.

The restructure will challenge Ant’s ability to creep deeper into lending, insurance and investment, she added.

The message to companies reaching too high, too fast is clear, says Nicolas Bahmanyar, a Beijing-based data and tech consultant.

“If in a group some activities are not totally legal, expect the whole group to be impacted,” he said.

“For international companies this is really something to take in consideration: all your eggs are in the same basket when it comes to dealing with the regulator.”

Alibaba may have dodged a bullet with a swift fine it can afford to pay, instead of a prolonged, sapping probe “that puts off investors and profitability in the long term,” says Larry Ong, analyst at SinoInsider consultancy firm.

But the monopolies regulator was only just getting started.

On Tuesday it said 34 tech companies — including giants Baidu, Tencent and ByteDance, the owner of TikTok — had been summoned and urged to “heed the warning” provided by Alibaba’s legal woes.

The firms have been given one month to undergo “complete rectification” — a rigorous self-assessment to ensure they are not in breach of monopoly laws, a statement by the State Administration for Market Regulation said.—AFP

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