9.6 C
London
Tuesday, April 13, 2021

China launches antitrust probe into technology giant Alibaba – WebMag

China has launched an antitrust investigation into Alibaba Group and will summon the technology giant’s Ant Group affiliate to meet in the coming days, regulators said on Thursday, in the latest blow for Jack Ma’s e-commerce and financial technology empire.

The probe is part of an accelerating crackdown on monopolistic behaviour in China’s booming internet space and the latest setback for Ma, the 56-year-old former school teacher who founded Alibaba and became China’s most famous entrepreneur.

It follows China’s dramatic suspension last month of Ant’s planned $37bn initial public offering, which had been on track to be the world’s largest, just two days before shares were due to begin trading in Shanghai and Hong Kong.

In a strongly worded editorial, the ruling Communist Party’s People’s Daily said that if “monopoly is tolerated, and companies are allowed to expand in a disorderly and barbarian manner, the industry won’t develop in a healthy, and sustainable way”.

Shares in Alibaba fell nearly 9 percent in Hong Kong on Thursday morning.

Regulators have warned Alibaba about the so-called “choosing one from two” practice under which merchants are required to sign exclusive cooperation pacts preventing them from offering products on rival platforms.

The State Administration for Market Regulation (SAMR) said in a statement on Thursday that it has launched a probe into the practice.

Financial regulators will also meet with Alibaba’s Ant Group fintech affiliate in the coming days, according to a separate statement by the People’s Bank of China on Thursday, casting another cloud over a potential revival of the share sale.

The meeting would “guide Ant Group to implement financial supervision, fair competition and protect the legitimate rights and interests of consumers,” the statement said.

Ant said it had received a notice from regulators and would “comply with all regulatory requirements”.

Alibaba said it would cooperate with the investigation and that its operations remained normal.

Fred Hu, chairman of Primavera Capital Group, an Ant investor, said global markets would be watching closely to see whether the moves are “politically motivated or genuine impartial law enforcement” and whether regulators target only the private sector but not state monopolies.

“It would be a tragedy if the antitrust law should be seen as ‘targeting’ successful private tech companies only,” he said.

Intensifying clampdown

Last month, Beijing issued draft rules aimed at preventing monopolistic behaviour by internet firms, marking China’s first serious antitrust move against the sector.

China’s Politburo this month pledged to strengthen anti-monopoly efforts next year and rein in “disorderly capital expansion”.

China also warned internet giants this month that it would not tolerate monopolistic practices and to brace for increased scrutiny, as it slapped fines and announced probes into mergers involving Alibaba and Tencent Holdings.

In China, Alibaba’s main e-commerce platform competes with rivals including JD.com Inc and Pinduoduo Inc.

“It’s clearly an escalation of coordinated efforts to rein in Jack Ma’s empire, which symbolised China’s new ‘too-big-to-fail’ entities,” Dong Ximiao, a researcher at Zhongguancun Internet Finance Institute, told the Bloomberg news agency. “Chinese authorities want to see a smaller, less dominant and more compliant firm.”

State media expressed support for the regulators.

“Fair competition is the core of the market economy” while monopoly “distorts allocation of resources, harms the interest of market players and consumers, and kills technological advancement”, the People’s Daily said.

China’s internet sector had benefitted from the government’s support for innovation but the industry must abide by rules and laws, it added.

Regulators have also become increasingly uncomfortable with parts of Ant’s sprawling empire, chiefly its most lucrative credit business that contributed close to 40 percent of Ant’s revenue in the first half of the year.

Days before Ant’s planned listing, top financial regulators told Ma and two top executives that the company’s lucrative online lending business would face tighter government scrutiny, sources told the Reuters news agency.

News China launches antitrust probe into technology giant Alibaba via partners Al Jazeera.


Avatar
WebMag
Web articles – via partners/network co-ordinators. This website and its contents are the exclusive property of ANGA Media Corporation

Trending

Activists Turn Facial Recognition Tools Against the Police – WebMag

In early September, the City Council in Portland, Ore., met virtually to consider sweeping legislation outlawing the use of facial recognition technology. The bills...

New Jersey postal worker dumped 1,800+ pieces of mail, including election ballots – WebMag

A New Jersey postal worker is accused of dumping more than 1,800 pieces of mail, including general election ballots and political flyers that he...

Report: Biden’s infrastructure bill hits major road block as Sen. Manchin comes out against it – DNyuz

Swing vote Democratic Sen. Joe Manchin (W.Va.) announced on Monday he does not support President Biden’s $2 trillion infrastructure bill as it currently stands,...

Report: Psaki forced to answer for Biden ‘Pinocchios’ over Georgia election law claims – DNyuz

White House Press Secretary Jen Psaki on Monday was pressed by both liberal and conservative members of the media about President Biden’s opposition to...

Report: WaPo Blog Authors Stand By Their ‘Predictable Pattern’ Border Claim Despite Record Numbers – DNyuz

The authors of a Washington Post’s Monkey Cage blog post arguing that “the migrant ‘surge’ at the U.S. southern border is actually a predictable...

Related news

Report: Scientists have spent nearly 100 years searching for a better way to give vaccines – DNyuz

There are a dozen Covid-19 vaccines that healthcare professionals are administering worldwide, and all of them require needles.That’s not necessarily a bad thing: Shots...

Report: Biden’s infrastructure bill hits major road block as Sen. Manchin comes out against it – DNyuz

Swing vote Democratic Sen. Joe Manchin (W.Va.) announced on Monday he does not support President Biden’s $2 trillion infrastructure bill as it currently stands,...

Report: Psaki forced to answer for Biden ‘Pinocchios’ over Georgia election law claims – DNyuz

White House Press Secretary Jen Psaki on Monday was pressed by both liberal and conservative members of the media about President Biden’s opposition to...

Report: WaPo Blog Authors Stand By Their ‘Predictable Pattern’ Border Claim Despite Record Numbers – DNyuz

The authors of a Washington Post’s Monkey Cage blog post arguing that “the migrant ‘surge’ at the U.S. southern border is actually a predictable...

LEAVE A REPLY

Please enter your comment!
Please enter your name here