China's leading market watcher has launched an investigation into Alibaba into alleged anti-competitive practices at the e-commerce firm. This is Beijing's most recent drive to contain the country's ever-growing internet titans.
The state administration for market regulation said Thursday in a brief statement that it is investigating Alibaba for its one-of-two-choice policy, which forces traders to sell exclusively on Alibaba and skip rival platforms JD.com and Pinduoduo .
"Today the Alibaba Group received notification from the State Administration of Market Regulation that an investigation has been initiated into the company under the Antimonopoly Act. Alibaba will be actively working with regulators on the investigation, "Alibaba said in a statement.
"The company's business operations will remain normal."
Alibaba's shares fell more than 8% on the Hong Kong Stock Exchange on Thursday.
On the same day, state-backed Xinhua reported that the Ant Group, Alibaba's subsidiary, had been asked by a group of tax authorities to discuss its compliance work. Ant, which operates Alipay's popular e-wallet and acts as an intermediary for financial services and customers, has committed to taking steps to curb debt risk to Chinese Authorities abruptly canceled his whopping IPO last month.
“Today Ant Group received a meeting note from regulators. We will seriously review and strictly adhere to all regulatory requirements and make every effort to complete all related work, ”the company said in a statement.
Some argue that the crackdown will be a long time coming for China's internet giants, which have been allowed to grow in a relatively loose regulatory environment. The Alibaba case is a "major step" in China's anti-monopoly rules for the internet industry, according to an opinion piece published in the official newspaper of the ruling Chinese Communist Party. The article allayed fears that stricter regulations could deal a blow to the industry, saying Alibaba's investigation was "beneficial for restoring orders and promoting long-term, healthy development of the platform economy."