China Intensifies Alibaba Crackdown With Anti-monopoly Probe; Xi Unrelenting On Jack Ma
Chinese regulators on Thursday launched an anti-monopoly investigation of e-commerce giant Alibaba Group, stepping up official efforts to tighten control over China’s fast-growing tech industries. The State Administration for Market Regulation (SAMR) said it was looking into Alibaba’s policy of “choose one of two,” which requires business partners to avoid dealing with competitors. The one-sentence statement gave no details of possible penalties or a timeline to announce a result.
According to the Associated Press, Chinese leaders had said earlier that an economic priority in the coming year will be to step up anti-monopoly enforcement. They appear to be especially concerned about tightening control over Alibaba and other dominant internet companies that are expanding into finance, health care and other businesses. According to media reports, shares in Alibaba fell 6% in early Hong Kong trade.
Chinese state-owned media expressed support for the regulators. The official mouthpiece of the CCP, People’s Daily said, “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 advancement.” China’s internet sector had benefited from the government’s support for innovation, but the industry must abide by rules and laws, it added.
Alibaba’s founder Jack Ma is China’s richest entrepreneur and one of the country’s best-known global figures. Regulators earlier forced the suspension of the stock market debut of Ant Group, an online finance platform spun off from Alibaba. A separate announcement later said officials of Ant had been summoned to meet with regulators.
Alibaba, the world’s biggest e-commerce company by total sales volume, and a Tencent Holdings-backed company were fined in mid-December for failing to apply for official approval before proceeding with some acquisitions. In a statement, China’s State Administration for Market Regulation said that it fined Alibaba 500,000 yuan ($76,500) for increasing its stake in department store company Intime Retail Group to 73.79% in 2017 without seeking approval.
