[ad_1]
Deal
SHANGHAI / HONG KONG: China has launched an antitrust investigation into Alibaba Group and will convene the tech giant’s Ant Group subsidiary to meet in the coming days, regulators said Thursday, in the latest blow to the fintech and e-commerce empire. by Jack Ma.
FILE PHOTO: An Alibaba Group logo is seen during the World Internet Conference (WIC) in Wuzhen, Zhejiang Province, China on November 23, 2020. REUTERS / Aly Song / File Photo
SHANGHAI / HONG KONG – China has launched an antitrust investigation into Alibaba Group and will convene the tech giant’s Ant Group subsidiary to meet in the coming days, regulators said Thursday, in the latest blow to the fintech and commerce empire. Jack Ma’s email.
The investigation is part of a growing crackdown on monopoly behavior in China’s growing internet space, and the latest setback for Ma, the 56-year-old former school teacher who founded Alibaba and became China’s most famous businessman.
This follows 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. in Shanghai and Hong Kong.
In a heavily redacted editorial, the ruling Communist Party’s People’s Daily said that if “monopoly is tolerated and companies are allowed to expand in a haphazard and barbaric manner, the industry will not develop in a healthy and sustainable manner.”
Alibaba shares fell nearly 9% in Hong Kong on Thursday morning.
Regulators have warned 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 a statement Thursday that it had launched an investigation into the practice.
Financial regulators will also meet with Alibaba’s Ant Group fintech subsidiary in the coming days, according to a separate statement from the People’s Bank of China on Thursday, casting another cloud over a possible revival of the share sale.
The meeting “will 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, president of Primavera Capital Group, an Ant investor, said global markets would be watching closely to see if the moves are “politically motivated or genuine and impartial law enforcement” and if regulators are targeting the sector only. private but not to state monopolies.
“It would be a tragedy if antitrust law was seen as ‘targeting’ only successful private tech companies,” he said.
SUPPORT INTENSIFICATION
Last month, Beijing issued draft rules aimed at preventing monopolistic behavior by internet companies, marking China’s first serious antitrust measure against the sector.
China’s Politburo promised this month to strengthen antitrust efforts next year and curb the “disorderly expansion of capital.”
China also warned internet giants this month that it would not tolerate monopolistic practices and that it was bracing itself for increased scrutiny as it imposed fines and announced merger investigations involving Alibaba and Tencent Holdings.
In China, Alibaba’s main e-commerce platform competes with rivals such as JD.com Inc and Pinduoduo Inc.
State media voiced support for regulators.
“Fair competition is at the core of the market economy,” while monopoly “distorts the allocation of resources, harms the interests of market players and consumers, and kills technological advance,” said the People’s Daily.
China’s Internet sector has benefited from government support for innovation, but the industry must comply with rules and laws, he added.
Regulators have also 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.
Days before Ant’s planned listing, top financial regulators told Ma and two top executives that the company’s lucrative online loan business would face tougher government scrutiny, sources told Reuters.
(Reporting by Samuel Shen and Emily Chow in Shanghai; Cheng Leng, Ryan Woo, and Lusha Zhang in Beijing; and Julie Zhu and Kane Wu in Hong Kong; written by Tony Munroe; edited by Stephen Coates)
