China’s market regulators launched an anti-monopoly probe into Alibaba, a Chinese multinational technology company founded by the Chinese tech entrepreneur Jack Ma. The investigation has been filed by the State Administration for Market Regulation over alleged monopolistic practices.
“Today, Alibaba Group has received notification from the State Administration for Market Regulation that an investigation has been initiated into the Company pursuant to the Anti-Monopoly Law. Alibaba will actively cooperate with the regulators on the investigation,” Alibaba said in a statement.
Regulators also revealed that Ant Group, Alibaba’s affiliate, has been summoned by a group of finance authorities to discuss its “compliance” work. The Group said it would “diligently study and strictly comply with regulatory departments’ requests”.
This move comes under the regulators’ “choosing one from two” practice, in which merchants are required to sign exclusive cooperation pacts inhibiting them from offering products on competitor’s platforms.
On Thursday morning, shares in Alibaba plummeted to nearly 9% in Hong Kong.
Critics argue that this move had long been foreseen for China’s internet giants, given their surging level of growth under a relatively relaxed regulatory environment.
Bill Bishop, a writer at China oriented newsletter Sinocism wrote, ““The party has once again reminded all private entrepreneurs that no matter how rich and successful you are it can pull the rug out from under your feet at any time.”