Alibaba under investigation by competition authorities
Alibaba under investigation by competition authorities
Beijing worries about the power of technology groups and their forays into the online lending sector
Alibaba is in Beijing'scrosshairs. Chinese competition authorities announced on Thursday that it was opening an investigation against the e-commerce giant on "suspicion of monopolistic practices." The State Administration for Market Regulation also announced that it had contacted Ant Group, the world's leading online payment company, for "supervision" issues, less than two months after Beijing cancelled at the last minute the IPO of thisAlibabasubsidiary.
Stock falls in Hong Kong
The announcements caused Alibaba shares to fall sharply on the Hong KongStock Exchange, with the stock falling more than 3 percent at the opening on Thursday. It must be said that this investigation is a thunderbolt in the Chinese business world, where Alibaba and its charismatic boss Jack Ma are symbols of the technological success of the Middle Kingdom.
The suspension in extremis of Ant Group's IPO at the beginning of November had already caused amazement. It came days after a speech in Shanghai by Jack Ma, in which the multi-billionaire criticised the actions of financial regulators. They are concerned about the power of technology groups and in particular their forays into the online lending sector, where they are breaking the prudential rules imposed on state-owned banks.
Strengthening anti-monopoly supervision
Chinese media have relayed these concerns by warning of the risks of financial turbulence. The investigation against Alibaba "is an important step for our country to strengthen anti-monopoly supervision in the Internet sector and promote a healthy long-term development of the digital economy," the People's Daily,an organ of the ruling Communist Party, wrote on Thursday. In a sign of the government's impatience with Alibaba, the group was fined 500,000 yuan (62,000 euros) last week for failing to report an acquisition.
Source:- Flash News and News Agencies