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Authorities confirmed the matter on Thursday. China has stepped in to quell anti-competitive sentiment in China’s growing internet space. The move against Alibaba is part of that.
Alibaba co-founder Jack Ma is seen as the last hurdle. Earlier last month, China blocked a planned £ 3.7bn IPO by Ant Group. The IPO was blocked just two days before Ant Group issued shares in Shanghai and Hong Kong.
In a forceful editorial at the time, People’s Party Daily, the ruling Communist Party of China, wrote:
Alibaba’s share price fell by nine percent in Hong Kong, Reuters reported. Alibaba’s rivals Meituan and JD.com have lost more than two percent.
Regulators warned Alibaba to refrain from “choosing one of two” behaviors. Because to do that, sellers had to make a special deal with Alibaba, and based on that deal, they couldn’t make any offers on Alibaba’s rival platform.
The State Administration for Market Regulation (SAMR) said on Thursday it had launched an investigation into the behavior. In a separate statement, the People’s Bank of China said regulatory officials would also meet with Ant Group’s Alibaba Fintech division.
The meeting “will guide the Ant Group on the application of financial supervision, fair competition and the protection of legitimate rights and interests of consumers.” – Said the statement.
Ant Group confirmed the news of the notice and said it would comply with all the regulatory body’s demands. Alibaba, on the other hand, said that it would cooperate in the investigation and that all activities would proceed normally.
Fred Hu, chairman of Hong Kong’s Primavera Capital Group and an investor in Ant Group, said the global market would see if the measures were “politically influenced” and that regulators only targeted the private sector, avoiding state monopolies.
“It would be unfortunate if you saw that antitrust law applies only to successful private technology companies.” – He said.
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