China stepped up its scrutiny of the country’s rapidly growing internet companies by launching an antitrust investigation into Alibaba (NYSE: BABA).
China’s top market regulator, State Administration for Market Regulation, said on Thursday that it would investigate Alibaba’s alleged monopolistic behaviour. Alibaba is Jack Ma’s online shopping and cloud computing giant. The commission said that it would investigate the company’s practice of requiring merchants to sign agreements that prevent them from selling on rival platforms, a type of restriction known as “choosing one from two.”
Additionally, the People’s Bank of China has announced that Ant Group, Alibaba’s financial affiliate, will be summoned to a meeting by the country’s four financial regulators in the next few days. Ant Group will “be guided by this meeting” as it implements financial supervision and regulates its services, the central bank said in a statement.
A few weeks ago, Chinese officials forced Ma to cancel Ant Group’s planned initial public offering at the last minute. It would have been the most considerable stock,the most extensive sting in history.
Alibaba (BABA) spokesman said that its businesses were operating normally in the meantime and that it would cooperate with the regulators. Ant says it will “seriously study and strictly comply with all regulatory requirements and work hard to fulfil all related tasks.”
The Chinese Communist prominentleading newspaper,People’s Daily, endorsed the Alibaba investigation in a piece on Thursday that appeared to have broader support and coordination behind the move.
The article said that this step was essential for strengthening antimonopoly oversight in the internet sphere. “This will facilitate the regulation of a healthy industry and promote the long-term development of platforms.”