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China has announced an investigation into the dominance of tech giant Alibaba. The China State Administration of Market Regulation (SAMR) made the announcement on Thursday. The accusation against Alibaba is that the company forced merchants to sign an agreement that prevented suppliers from selling their products on other platforms. Chinese lawmakers have previously warned Alibaba not to try to create a monopoly. In the future, the Chinese monetary authorities will also investigate Alibaba’s fintech partner Ant Group.
The Chinese government’s crackdown on Chinese tech giants like Alibaba-Tencent is on the rise. They have been concerned with the growing size and capacity of organizations. Lawmakers fear that these companies in China could have a major impact on their millions of customers on matters such as purchases and payments.
Basically, policy makers will investigate Alibaba’s so-called “pick one of two” approach.
Alibaba founder Jack Ma held a discussion meeting in late October. There he criticized regulators and China’s banking system. Many believe that this criticism is the real reason behind the decision of this research. He says that Chinese banks operate with a “pawn shop” mentality. That is why many people think that they are now paying the price for that comment.
Alibaba, founded by Jack Ma, is already under pressure from the Chinese authorities. Last month, its partner Ant Group (formerly known as Alipay) was forced to suspend its entry into the stock market. If included, it would be the world’s largest start in the stock market.
Source: BBC.
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