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China launches antitrust investigations on Alibaba for alleged monopoly practices, as regulators summon Ant to meet
China’s antitrust regulator officially launched investigations into Alibaba Group Holding for alleged monopolistic business practices, including a requirement that e-commerce merchants choose only one platform as their exclusive distribution channel. Separately, China’s central bank said it would convene Ant Group executives for a meeting. with financial regulators covering banking and insurance, securities and foreign exchange, as it tightens regulations on the fintech industry.The State Administration for Market Regulation, the antitrust enforcement agency, said in a statement that it recently began investigations on Alibaba on suspicion of monopolistic conduct. as “forced exclusivity”. Get the latest insights and analysis from our Global Impact newsletter on the great stories originating from China. The term refers to a business practice in the Chinese internet industry where companies make merchants choose only one platform as their exclusive sales and distribution channel. “Alib aba will actively cooperate with regulators in the investigation,” the company, which owns the South China Morning Post, said in a statement. “The company’s business operations remain normal.” Alibaba’s US deposit receipts fell 34 points, or 13%, on Thursday on the New York Stock Exchange in a shortened trading session before the Christmas holidays, while the Dow Jones Industrial Average, the Nasdaq index and the S&P; 500 all made small profits. In Hong Kong, shares fell as much as 8.9%, their biggest intraday decline since November 11, while shares in related companies Alibaba Pictures and Alibaba Health also fell. Ant Group is not listed on the stock exchange. The drop in Alibaba’s share price affected several of China’s largest internet and technology companies: game publisher and dominant social media operator Tencent Holdings, e-commerce giant JD.com, and internet giant. Meituan on-demand services. The fall in the shares of the four companies wiped out $ 86 billion from their combined market capitalization from the interruption of trading at 12:30 p.m. on a shortened trading day due to Christmas Eve in Hong Kong.Zhao Xiaofeng, Assistant Professor from the finance and insurance department, said the investigation was a “big pressure test” for Alibaba: “Is Alibaba’s success in the past really due to a good business model or is it simply because the company has some scarce resources? And have you been in a monopoly position? “However, Zhao said that even if the authorities fine the company, it would be simply” symbolic. “” The real impact is that Alibaba will not be able to force merchants to choose a single platform to sell their products and the company could lose merchants and consumers, “Zhao said.” In the short term, the investigation will undermine Alibaba’s growth as it can no longer take the stake. market so quickly by undermining smaller rivals, but the actual impact would not be as great as expected [because] China’s e-commerce industry is a very competitive sector that is difficult for new entrants to enter, ”said Wang Chen, partner at Xufunds Investment Management in Shanghai. Beijing Lectures E-Commerce Platforms In New Antitrust Warning For Big Tech “Alibaba May Retain Most Of Its Current Market Share Rather Than Losing It [even if] growth will slow down. In the long term, the research is good for the e-commerce industry and will prevent some big players from expanding rapidly. ” People’s Daily, the Communist Party’s spokesman newspaper, said in an op-ed that Alibaba’s antitrust investigation was aimed at “better development.” “This investigation does not mean that the attitude and support of the State towards [internet] platforms have changed, ”said the newspaper. “It is aimed precisely at regulating and developing them better and promoting their healthy development to make a greater contribution to the high-quality development of the Chinese economy.” Ant Group’s $ 37 billion initial public offering (IPO) was withdrawn by regulators last month just 48 hours before the shares began trading in Shanghai and Hong Kong, in the largest financial fundraiser in the US. Global finance – Financial regulators were concerned about Ant Group’s lending practices and wanted the fintech company to increase its capital allocation to back its loans to small and medium-sized businesses. The People’s Bank of China, the China Banking and Insurance Regulatory Commission (CBIRC), the China Securities Regulatory Commission (CSRC) and the State Administration of Foreign Exchange (SAFE) will meet with Ant Group in the near future to “Supervise and guide Ant Group in accordance with the principles of the market and the rule of law to implement the requirements, including financial supervision n, fair competition and protection of the legal rights and interests of consumers, as well as regulate its operation and development of financial services, “said the central bank. Ant Group said it will” seriously study and strictly comply with all regulatory requirements and fully commit to comply with all related work, “according to a statement on its official account on the platform of social media WeChat. More from South China Morning Post: * Alibaba Evaluates Response to Ant’s IPO Filed As Quarterly Revenue Increases 3 0% $ 3.6 billion to take control of China’s largest hypermarket operator Sun Art from the family of French billionaire Mulliez * Ant Group affirms its commitment to adopt supervisory, stable innovation in regulatory meeting before departure to World’s Largest Stock Exchange * Ant Group removes small bank online deposit products from its platform while aligning itself with China’s new financial technology. This article China launches antitrust investigations on Alibaba into alleged monopoly practices as regulators summon Ant to meet first appeared on South China Morning Post For the latest news from the South China Morning Post, download our mobile app. Copyright 2020.
