China's antitrust regulator doled out a record 18.2 billion yuan fine to e-commerce giant Alibaba on Saturday for abusing its market dominance. The figure is equivalent to $2.8 billion and 4 percent of the company's domestic annual sales. Additionally, Alibaba will have to revamp its operations and submit a "self-examination compliance report" within three years, per The Wall Street Journal.
Considering the penalty far surpasses Qualcomm's previous record $975 million fine in terms of raw money (relatively that was a bigger hit) it seems like a real blow to Alibaba, especially since its founder Jack Ma remains under heavy government scrutiny after criticizing Beijing's regulatory restrictions. But it may actually be a weight off the company's shoulders, at least for now.
"China's record fine on Alibaba may lift the regulatory uncertainty that has weighed on the company since the start of an anti-monopoly probe in late December," Bloomberg Intelligence analysts Vey Sern-Ling and Tiffany Tam said. They described the fine as a small price to pay for some clarity.
The fine alone shouldn't be too much to worry about for Alibaba, suggested Jeffrey Towson, a former professor at Peking University's Guanghua School of Management. "That is serious money, but it's not going to hinder their development," he told the Journal.
In a statement, Alibaba said it "accepts the penalty with sincerity and will ensure its compliance with determination."
That said, Bloombergcalled the Alibaba investigation "one of the opening salvos in a campaign seemingly designed to curb the power of China's internet leaders and their billionaire founders" like Ma, so there may be more to come. Read more at The Wall Street Journal and Bloomberg. Tim O'Donnell
After securing its first black Bachelorette — and all the positive press that came along with the poise and humor of Rachel Lindsay — the Bachelor franchise nonetheless found itself in the midst of controversy this month after allegations of sexual misconduct shuttered production on its summer spin-off show, Bachelor in Paradise.
On Wednesday, CNN Money offered a glimpse at the contract contestants of Bachelor in Paradise signbefore appearing on the show, acquired from a "source close to production." The contract requires contestants to forfeit a breathtaking amount of control over their own likenesses:
After reviewing parts of the contract provided to her by CNN Money, Nicole Page, a New York-based entertainment attorney at Reavis Parent, said that it meant, from the producers' perspective, "I can basically take your image and do whatever I want with it and I own it and you have no recourse." [...]
If a news program twisted the facts about people in this way, they could be sued — and they would likely lose the case. But all of this kind of manipulation is fine on Bachelor in Paradise. The contract makes that clear: Contestants sign away to producers "the right to change, add to, take from, edit, translate, reformat or reprocess... in any manner Producer may determine in its sole discretion." And, once the producers have done all that editing, the contestants understand that their "actions and the actions of others displayed in the Series may be disparaging, defamatory, embarrassing, or of an otherwise unfavorable nature and may expose me to public ridicule, humiliation, or condemnation." [CNN Money]
Contestants further cede their right to a jury trial should they sue the show for any reason, agreeing to subject their claims to the confidential arbitration process. Another lawyer told CNN Money that the contract is "clearly ... one-sided."
An investigation by parent company Warner Bros. into the alleged incident during filming of this season of Bachelor in Paradise, in which consent between two intoxicated contestants during a sexual encounter was at issue, concluded there had been no wrongdoing. Production will resume, though the contestants involved will likely not return to the show. Read more about the rules of Bachelor in Paradiseat CNN Money. Kimberly Alters