China's antitrust regulator has fined Alibaba Group Holding Ltd. 18.228 billion yuan ($2.8 billion) for abusing its dominant position over competitors and merchants on its e-commerce platforms, a record penalty in China as the business empire of the company's founder Jack Ma comes under a wave of scrutiny.

China's State Administration of Market Regulation said in Beijing on Saturday that Alibaba had penalized certain merchants who sold goods on both Alibaba and rival platforms, a practice known as "er-xuan-yi," meaning "choose one out of two"

As part of the penalty, the regulators will require Alibaba to overhaul its operations and submit a "self-examination compliance report" within the next three years.