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China’s antitrust body has launched an investigation into the technology giant Alibaba Group on alleged anti-competitive practices.
The State Market Regulation Administration initiated investigations into the Alibaba Group, claiming that the company was involved in monopolistic conduct, such as “forced exclusivity”, by requiring e-commerce merchants to choose only one platform as the exclusive distribution channel , according to the South China Morning Post.
In a statement, Alibaba said it “will actively cooperate with regulators in the investigation”, adding that “the company’s business operations will remain normal”.
Last month, the State Market Regulatory Administration imposed fines on Alibaba and China Literature, supported by Tencent, for failing to adequately report previous acquisition agreements for release.
Alibaba and China Literature were fined 500,000 yuan ($ 76,464), the maximum under a 2008 antimonopoly law, reported Reuters.
The acquisition deals for which Alibaba was fined include its $ 692 million investment in Intime in 2014 and the e-commerce giant’s $ 2.6 billion offer in 2017 to privatize Intime, the report said.
Meanwhile, China Literature was fined for not reporting its acquisition of New Classics Media in 2018.
Separately, the financial services arm of Alibaba Group, the owner of Alipay, has been summoned by the central bank of China to meet with financial regulators to discuss the company’s regulatory compliance, the South China Morning Post said.
“Today, the Ant Group received a meeting notice from the regulators. We will study seriously and strictly comply with all regulatory requirements and will endeavor to do all related work,” said the Ant Group in a statement.
In November, Chinese regulators canceled the Ant Group’s IPO after concluding that the listing on the Shanghai stock exchange may no longer have met regulatory and disclosure requirements due to “recent changes in the fintech environment”.
This then prompted Ant Group to also suspend its listing in Hong Kong.
“The Ant Group was notified by the Shanghai Stock Exchange today that our listing plan A shares on the Shanghai Stock Exchange would be suspended. Consequently, Ant decided that the simultaneous listing plan H shares on the Shanghai Stock Exchange Hong Kong will also be suspended. ” the company said in a statement at the time.
The crackdown on Alibaba Group’s operations by Chinese regulators follows the outspoken speech of founder Jack Ma, which he delivered during the Bund summit in Shanghai in October, where he criticized the country’s authoritarian regulation and state dominance over the banking system.
“Good innovations can coexist with regulations, but not regulations the old way. We cannot manage an airport the way we manage a train station, nor can we manage the future the way we manage the past,” said Ma, according to a transcript. .
He went on to say, “We must end the ‘pawnshop’ mentality within the financial industry today. We must rely on the development of the credit system … I discovered that the pawnshop mentality is a serious problem in China and has affected many entrepreneurs. This becomes extremely serious when entrepreneurs need to commit all of their assets. They are under enormous pressure and what they do is distorted. “
The Alibaba Group reported relatively strong financial results in the second quarter in November. For the period ended September 30, net income was $ 3.9 billion.