With Alibaba investigation, China gets tougher on tech
China’s internet giants came to dominate segments of the world’s No. 2 economy because Beijing’s authoritarian government largely looked the other way while they grew and grew.
Now the companies have the regulators’ full attention.
The country’s market watchdog said Thursday that it had opened an investigation into whether the e-commerce group Alibaba had engaged in monopolistic practices, such as restricting vendors from selling merchandise on other platforms. Separately on Thursday, four Chinese financial regulatory agencies, including the central bank, said they would meet soon with Ant Group, Alibaba’s finance-focused sister company, to discuss new supervision.
The stepped-up scrutiny of Alibaba
and Ant — the pillars of the business empire of Jack Ma, China’s most famous tycoon — coincides with efforts by the U.S. and the European Union to curb the power of Western internet powerhouses such as Google and Facebook.
China has produced its own crop of powerful internet titans, and they have been celebrated as icons of the nation’s technological advancement. The government kept a tight grip on what people read and said on these platforms. But authorities were less responsive to concerns about the companies’ size and clout, even as the businesses reached deeper into the lives of ordinary people in China than the U.S. internet giants have elsewhere.
On Thursday, People’s Daily, the main newspaper of the Chinese Communist Party, swiftly endorsed the inquiry into Alibaba.
“This is an important step in strengthening anti-monopoly oversight in the internet sphere,” the article said.
Alibaba’s New York-listed shares fell more than 13 percent Thursday.
Alibaba said it would cooperate with regulators and that its businesses were operating normally in the meantime. Ant said it would “seriously study and strictly comply with all regulatory requirements and commit full efforts to fulfill all related work.”
Beijing’s pushback against Big Tech erupted into the open last month, when officials halted Ant’s long-awaited initial public offering just days before its shares had been expected to begin trading. The move came after Ma, who is by some counts China’s richest man, publicly accused Chinese regulators of being too obsessed with containing financial risk.