Chinese lawmakers have said that the government has launched an antitrust investigation against the "Alibaba" group, and will summon the branch of the technology giant Ant Group to meet in the coming days, in the latest blow to Jack Ma's empire of e-commerce and financial technology, according to A report published by "Reuters" agency (Reuters).
The investigation comes as part of an accelerated campaign against anti-competitive behavior in the Internet sphere in China, and the most recent setback for Jack Ma, a former teacher who founded Alibaba and became the most famous businessman in China.
The investigation came after China last month suspended Ant Group's planned $ 37 billion initial public offering (IPO), which was on track to be the largest in the world, just two days before shares began trading in Shanghai and Hong Kong.
In a strongly worded editorial, the ruling Communist Party’s People's Daily said, "If monopoly is tolerated, and companies are allowed to expand in an unregulated manner, the industry will not develop in a healthy and sustainable way."
Lawmakers have warned Alibaba about the so-called "one-of-two" selection practice, whereby merchants are required to sign exclusive cooperation agreements that prevent them from offering products through competing platforms.
The Chinese Market Regulatory Authority, known as SAMR, said yesterday, Thursday, that it had launched an investigation of this practice.
Financial regulators will also meet Ant Group, the financial arm of Alibaba Group, in the coming days, according to a separate statement issued by the People's Bank of China yesterday, Thursday.
The statement said the meeting would direct Ant Group to implement financial supervision, fair competition and protect the legitimate rights and interests of consumers.
Ant Group said it had received notice from the regulators, and would comply with all regulatory requirements, while Alibaba said it would cooperate with the investigation, and that its operations remained normal.
The investigation marks the latest setback for Jack Ma, a former teacher, who founded Alibaba and became the most famous businessman in China (European News Agency)
Global markets are monitoring the investigation;
To know whether the moves are politically motivated? And are regulators targeting private, not government, monopolies?
Jack Ma has remained out of the public eye since late October when he criticized the regulatory system in China, accused him of suppressing innovation in a speech that upset officials, and launched a series of events that led to the suspension of the Ant Group IPO.
After years of indirect dealing with e-commerce, Beijing has made clear its antitrust intentions.
Last month it issued draft rules aimed at preventing monopolistic behavior of internet companies, and this month the Politburo pledged to boost antitrust efforts in 2021 and curb the uncontrolled expansion of capital.
China also told internet giants this month to prepare for further scrutiny, as it imposed fines and announced merger investigations involving Alibaba and Tencent.
Chinese internet companies have enjoyed unprecedented growth for years, and the latest regulatory moves have sent a clear message that the golden time for many of those companies is over, and that no company in China can be too big to fail.
China is not the only one trying to limit the control of technology companies on the markets, as American technology companies such as Google and Facebook are also facing monopoly issues filed over them in several US states.