AMN/ WEB DESK
In a big development in China’s market ecosystem, the country’s top market watchdog on Thursday started investigation into alleged anti-competition practices by e-commerce giant Alibaba. The State Administration for Market Regulation (SAMR) in a statement announced that, based on reports, it has filed investigations into Alibaba Group Holdings Co., Ltd. for suspected monopolistic conduct.
The fresh investigation follows the dramatic suspension of the planned $37 billion IPO of its affiliate Ant Group in November and the summoning of its founder billionaire Jack Ma by government officials, as well as the People’s Bank of China, to ‘provide views regarding the health and stability of the financial sector’. Regulators will also hold ‘supervisory and guidance’ talks with Alibaba’s gigantic financial services subsidiary Ant Group, state media reported. The news led to tumbling of Alibaba shares by more than 8 per cent in Hong Kong, as per reports.
China’s official news agency reported on Thursday that acting on information, China’s State Administration for Market Regulation (SAMR) has started investigation on Alibaba Group for alleged monopoly conduct including implementing an ‘exclusive dealing agreement’. Draft anti-monopoly rules released in November gave the government wide latitude to rein in entrepreneurs who until recently enjoyed unusual freedom to expand their realms.
Once hailed as drivers of economic prosperity and symbols of the country’s technological prowess, Alibaba and rivals like Tencent Holdings Ltd. Have been recently facing increasing pressure from regulators as they have gained hundreds of millions of users and command influence over almost every aspect of daily life in China. Alibaba’s affiliate company Ant Group came into limelight with its main product Alipay, the online payments platform and super-app that is now deeply embedded in China’s economy. But the company has also expanded into offering loans, credit, investments and insurance to hundreds of millions of consumers and small businesses, seen as competitors to the wider banking system.
Ant Group said it would “diligently study and strictly comply with regulatory departments’ requests”. Alibaba Group said in a statement that they have received notification from the State Administration for Market Regulation and will actively cooperate with the regulators on the investigation adding that its “business operations remain normal.”
Experts see it as a strong message to big tech firms, part of broader efforts to rein in an increasingly influential internet sphere. The Chinese regulators have recently removed several apps, including banning thousands gaming apps on Apple App Store, in a wide-ranging ‘clean-up’ of online content related to illegal activity, including obscenity, violence, fraud or gambling.