China kicked off an Investigation into Alibaba Group Holding Ltd. over Monopoly Allegations
By: Ashwathy Nair
- Regulators will separately summon affiliate Ant to the meeting to drive home stringent financial regulations.
- Tencent and internet services giant Meituan declined more than 1 per cent.
- It is clearly an escalation of coordinated efforts to hold back Jack Ma’s empire.
Alibaba Group Holding Ltd. was initiated with an investigation by China over being suspected for monopolistic practices and summoned Ant Group Co. partner of a conference on high-level financial oversight, raising scrutiny over the twin pillars of the internet empire of billionaire Jack Ma.
It was stated by the top antitrust watchdog that Alibaba is being investigated by the State Administration for Market Regulations. Regulators that includes the central bank, as well as banking watchdog, will separately bring back affiliate Ant to a meeting that is intended to drive home increasingly stringent financial requirement, which now is posing a threat towards the growth of the world’s biggest online financial services firm. And it was confirmed in a statement that it would review and comply with all specifications for its official WeChat account.
Alibaba and its competitors, such as Tencent Holding Ltd, were once addressed as drivers of economic growth and icons of the country’s technological expertise, is now facing increasing pressure from its regulators after gathering up hundreds of millions of users and gaining influence over almost every aspect of daily life in China.
The Hong Kong stock of Alibaba slid by 7.7 per cent to a five-month intraday holder, while Internet Services giant Meituan and Tencent has declined more than 1 per cent. Shares in SoftBank Group Corp., the largest shareholder of Alibaba, erased gains in order to trade as much as 2.7 per cent lower in Tokyo.
Investors are divided over the extent to which Beijing will be going after Alibaba – Asia’s largest corporation after Tencent – As the government of Xi Jinping is planning to carry out a raft of new anti-monopoly measures with its compatriots. The leaders of the country have said nothing about how harshly they plan to crack down or why they have now chosen to act. The proposed amendments published in November grant the government an extraordinarily broad latitude to bring in tech entrepreneurs such as Ma, who have had an unusual amount of independence to grow their empires until recently.
Dong Ximiao, a researcher at Zhongguancun Internet Finance Institute, stated that “It is obviously an escalation of joint efforts to bring in the empire of Jack Ma, which symbolised China’s current ‘too-big-to-fail’ institutions. A smaller, less dominant and more compliant firm is what the Chinese authorities want to see.”