Alibaba to be probed for antitrust charges

The announcement spooked many investors who dumped shares of Alibaba’s subsidiaries and affiliates, as well as other internet firms that risk being targeted by Chinese antitrust regulators.

One of China’s top companies, tech-giant Alibaba, is being investigated by regulators on charges of monopolistic practices, the government announced Thursday.

The Alibaba Group logo is seen during the company's 11.11 Singles' Day global shopping festival at their headquarters in Hangzhou, Zhejiang province, China. (REUTERS)

“Acting on information, China’s State Administration for Market Regulation (SAMR) has started investigation on Alibaba Group for alleged monopoly conduct including implementing an ‘exclusive dealing agreement’,” Xinhua, China’s official news agency, announced in a single-sentence statement on Thursday.

The announcement spooked many investors who dumped shares of Alibaba’s subsidiaries and affiliates, as well as other internet firms that risk being targeted by Chinese antitrust regulators. The tech heavy STAR Market dropped 2.1%, while the CSI TMT Index fell 1.5%, according to Reuters. Alibaba shares fell nearly 9% in Hong Kong.

Owned by China’s most famous entrepreneur and increasingly vocal, Jack Ma, Alibaba is possibly the world’s biggest e-commerce company with hundreds of millions of users and billions of dollars in turnover.

Its three main sites Taobao, Tmall and Alibaba.com host millions of merchants and businesses.

The new investigation was preceded by the suspension of Alibaba group affiliate fintech company Ant Group’s planned IPO in early November, which was interpreted as an indication of the troubles ahead for the company.

The SAMR probe will focus on the monopolistic behaviour, the so-called “choosing one from two” practice and coaxing merchants to sign exclusive cooperation pacts, which then prevents them from offering products on rival platforms.

Separately, the People’s Bank of China, the China Banking Regulatory Commission and China Securities Regulatory Commission will also meet affiliate Ant Group for “supervisory and guidance” talks.

In a statement through its official Sina Weibo account, Alibaba stated it “will actively cooperate with regulators to complete the investigation,” according to the statement, adding that the company’s business operations remain unaffected.cv