China has officially launched an investigation into Alibaba Group’s alleged monopolistic practices, escalating its censorship actions against the online giant. In addition, Ant Group, which was also founded by Jack Ma, will be interviewed 2 times. The 2 actions mark the most vigorous enforcement action by Beijing authorities against China’s largest tech giant and its billionaire founder Jack Ma.
China’s State Administration of Market Supervision and Administration said in a statement that it had opened a case against Alibaba Group for alleged monopolistic practices, including “two-for-one” selection, based on a report, but did not provide further details. Alibaba’s largest shareholder SoftBank Group reversed its share price gains on the news, falling 2.3 percent in Tokyo. And because Hong Kong stocks are only trading for half a day today due to the Christmas holiday, Alibaba’s Hong Kong-listed shares closed early at noon, ending the day with a heavy 8.13 percent fall to HK$228.20, a new low in more than five months. Ali health, which is also listed in Hong Kong, also closed with a heavy drop of nearly 11%.
In response to China’s anti-monopoly investigation, Alibaba responded by saying, “We will actively cooperate with the regulator’s investigation.” It also stressed that the company’s business is operating as usual. Domestic competitors to Alibaba’s e-commerce platforms Taobao and Tmall include Jingdong and Jindo.
Chinese regulators quickly implemented and launched an investigation into Alibaba after the Central Economic Work Conference proposed strengthening anti-torchos and preventing disorderly capital expansion, and Ant Group, which is also owned by Jack Ma, will face a second interview. Many regulators said they will interview Alibaba Group’s affiliate Ant Group in the coming days to urge fair competition and protect consumer rights.
The two actions mark the strongest enforcement action by Beijing authorities against China’s biggest tech giant and its billionaire founder Jack Ma. The Bloomberg report describes this as probably the worst Christmas Eve Ma has ever experienced and the least wanted Christmas present.
Ant to be interviewed 2 times
China’s central bank issued an announcement saying that the central bank, the CBRC, the SEC and the State Administration of Foreign Exchange will interview Ant Group in the near future to urge and guide Ant Group to implement the requirements of financial regulation, fair competition and protection of consumers’ legitimate rights and interests in accordance with the principles of marketization and rule of law, and to regulate the operation and development of financial business.
The last time Ant’s actual controller and related management were interviewed occurred on the eve of the IPO, after which Ant Group was shouted at for listing in Shanghai and Hong Kong.
Ant Group responded to today’s announcement by saying that it received the notice of the interview from the regulator and will study and strictly comply with the requirements of the regulator and do a good job of implementing the relevant work without compromise.
Last month, Ant Group’s listing in Shanghai and Hong Kong was abruptly halted when Xinhua News Agency published an article, “Words cannot be spoken, things cannot be done, people cannot be random”, with a picture of a “white horse shaped like a cloud” floating in the air to insinuate that Ma Yun, the text insinuates and hides words in the picture.
Xinhua News Agency not only used the text to satirize Jack Ma, but also with a far-reaching picture. Image source: Xinhua News Agency
Ant Group said yesterday that its popular consumer lending platform, Huayana, is adjusting its quota for some young users to promote more rational spending habits. Ant Group did not provide an age range or other details on the users affected by the quota adjustment. The move suggests the fintech giant is scaling back its lending business exposure amid regulatory pressure.
The Wall Street Journal recently revealed that Ma had offered to hand over part of Ant Group to the government before its IPO to save its relationship with Beijing, but the group’s IPO still ended up calling for a lock. The newspaper quoted people familiar with the matter as saying that Ma said in an interview with regulators, “These platforms of Ant can be taken away whenever the state needs them.”
On November 2, just three days before Ant Group’s IPO, Jack Ma and other top Ant executives were interviewed by China’s four major regulators, and the next day, Ant’s IPO was urgently halted. The IPO, which was supposed to be the largest in human history, was blocked by the Chinese Communist Party, and it is likely that the IPO will not happen next year either.
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