Alibaba is the subject of an anti-monopoly investigation in mainland China. China’s State Market Supervision Bureau officially opened an investigation into Alibaba’s alleged monopoly practices, causing Ali’s stock price to plummet more than 8 percent this Thursday. The People’s Daily alluded to the anti-monopoly decision at the highest level of the Chinese Communist Party.
The official media People’s Daily reported on Thursday (24) that the General Administration of Market Supervision (GAMS) had investigated Alibaba for alleged monopolistic practices such as “choosing one over the other” based on reports. The People’s Daily also wrote that “strengthening anti-monopoly regulation is for better development” and that the Central Political Bureau meeting and the Central Economic Work Conference both explicitly called for strengthening anti-monopoly and preventing disorderly expansion of capital, implying that the anti-monopoly policy is decided at the highest level of the mainland.
High-level decision to open a case must be able to find out the problem
Internet finance industry insider Song Qing said in an interview with Radio Free Asia that the investigation has been progressing smoothly since the central joint investigation team stationed at Alibaba, Tencent and Meituan last week, and it is estimated that the next step will be to punish the suspected monopolies. She said: “The case must be filed with results, should be the intention of the top. Half a month ago, the program about the nationalization of Ant and the nationalization of Ali has been deliberately put out. Those programs are with red-headed documents. The nationalization of the aforementioned companies is already certain, and this move should speed up the nationalization, but I think there is now the meaning of killing the chicken for the monkey.”
News has been received on this stage this week from various sources that a multi-departmental investigation team from the central government was stationed at Alibaba back in late November, and also at giant sci-fi companies such as Tencent and Meituan.
Affected by the news, in the Hong Kong stock market, Alibaba shares fell sharply, dropping further down to a low of 226.4 yuan, down nearly 9 percent, after falling through the 230 yuan level. Ali health shares fell more than 10% to close at $23.65 at half-day.
Alibaba said it received a notice from the State Administration of Market Supervision to open an investigation into Alibaba’s suspected monopolistic behavior according to law, and the group will actively cooperate with the regulator’s investigation, adding that everything is normal in the company’s business at present.
Multi-government departments mobilize to investigate Ant Group
Ant Group also said that it received the notice of interview from the regulatory authorities on the same day, and the group will study carefully and strictly comply with the requirements of the regulatory authorities to do a good job. At present, in addition to the General Administration of Market Regulation (GAMR) filing a case to investigate Alibaba, the People’s Bank of China, the CBRC, the SFC and the State Administration of Foreign Exchange (SAFE) will also interview the management of Ant Group soon, which is the second interview by the regulators in the past two months.
Mr. Qian, a Nanjing scholar, told the station that the authorities lacked fairness in launching investigations against large companies such as Alibaba: “The reason for this is because China’s various harsh taxes in the traditional field are too high, and the Internet platform provides everyone with lower transaction costs and a more convenient consumption model, and the Internet industry is a monopoly caused by competition, not because of financial resources, much less administrative means. monopoly. For the market economy, it is actually healthy.”
Hong Kong Hong Hui asset management director and investment strategy director Lin Jiaqi interviewed by Radio Television Hong Kong, the central government will aim the gun at the business of a wide range of Alibaba, is trying to regulate the Internet companies in the future when there are large cases to learn from, I believe that the central government will successively file cases to investigate other companies, regulate the monopoly behavior will be more and more, the punishment will also be slowly strengthened.
Official media opinion for government image
The government’s image has been created by the official media through the creation of public opinion: “The people hate the rich, and now it’s a big company that’s going after them. The people took a look and clapped their hands. So he plays on this psychology of the public. With the help of the mouthpiece high propaganda, quietly engage the country into the people. The so-called financial chaos that he eventually wants to govern, he can’t solve it at all, but the nationalization he is completing step by step.”
In an article titled “Strengthening anti-monopoly regulation is for better development”, the People’s Daily, an organ of the Communist Party of China, said that an investigation was opened into Alibaba Group Holdings Ltd. for alleged monopolistic practices such as “choosing one over the other”. This is an important step for China to strengthen anti-monopoly regulation in the field of Internet. It also said that without rules, no square can be made. The investigation does not mean that the country’s attitude towards encouraging and supporting the platform economy has changed, but precisely to better regulate and develop the platform economy.
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