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BEIJING: China has launched an investigation into Alibaba Group on suspicion of monopolistic behavior and will convene its Ant Group to meet in the coming days, regulators said on Thursday (Dec. 24), in the latest blow to the country’s fintech and e-commerce empire. Jack Ma.
The measures follow China’s dramatic suspension last month of Ant’s planned $ 37 billion initial public offering, which was on track to be the world’s largest, just two days before the shares began trading. listed in Shanghai and Hong Kong.
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Alibaba shares fell 6 percent in early Hong Kong trading.
Regulators had previously warned e-commerce giant Alibaba about the “pick one of two” practice under which merchants must sign exclusive cooperative pacts that prevent them from offering products on rival platforms.
The State Administration for Market Regulation (SAMR) said in an online statement that it had launched an investigation into the practice.
Financial regulators will also meet with Alibaba’s fintech subsidiary Ant Group in the coming days, according to a separate statement from the People’s Bank of China on Thursday.
The meeting aims to “guide Ant Group to implement financial supervision, fair competition and protect the legitimate rights and interests of consumers,” the statement read.
Ant said it had received a notice from regulators and would “comply with all regulatory requirements.”
Alibaba did not immediately respond to a request for comment.
State media voiced support for regulators.
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“Fair competition is the core of the market economy,” while monopoly “distorts the allocation of resources, harms the interest of market players and consumers, and kills technological advance,” said the People’s Daily, the official newspaper of the ruling Communist Party of China.
China’s Internet sector has benefited from government support for innovation, but the industry must comply with rules and laws, he added.
If “monopoly is tolerated and companies are allowed to expand in a haphazard and barbarous manner, the industry will not develop in a healthy and sustainable way,” the editorial said.
Regulators have grown increasingly uncomfortable with parts of Ant’s expanding empire, primarily its more lucrative lending business that contributed about 40 percent of Ant’s revenue in the first half of the year.
