The announcement caused Alibaba’s share to drop 8% on the Hong Kong Stock Exchange. Authorities also contacted Ant Group, the world leader in online payments and a subsidiary of Alibaba.
The Chinese competition authorities announced on Thursday an investigation into the online trading giant Alibaba for “suspicious monopoly practices.”
The State Administration for Market Regulation also announced that it has contacted Ant Group, the global leader in online payments and a subsidiary of Alibaba, to discuss “supervision and advice,” a few weeks after Beijing thwarted its last-minute IPO.
The announcement of the investigation by the State Administration for Market Regulation of the company founded by the charismatic Jack Ma caused a sharp drop in the action of the online trading champion, which lost more than 8% in the middle of the session on the Stock Exchange. Hong Kong.
“There is certainly an escalation of coordinated efforts aimed at hampering Jack Ma’s empire, symbolizing the new Chinese entities too big to fail,” said analyst Dong Ximiao of the Zhongguancun Institute of Internet Finance, the “Silicon Valley” of Beijing, quoted by the agency Bloomberg.
The authorities have not provided details on what they reproach Alibaba, apart from an “exclusivity agreement” of which nothing else is known.
Alibaba will cooperate “actively”
The e-commerce giant has “promised to actively cooperate in the investigation with regulators.”
In addition to the parent investigation, regulators also announced that they have contacted Ant Group, the global leader in online payments and an Alibaba subsidiary, to discuss “oversight,” a few weeks after Beijing thwarted at the last minute. its IPO.
Its IPO was announced as a world record, with a loot of 34.4 billion dollars (27.4 billion euros).
In a statement, Ant Group made it known that it will “quickly study the demands of the authorities and strictly comply with them.”
The suspension in extremis of the Ant Group IPO in early November had created a huge stir. It came a few days after Jack Ma’s speech in Shanghai, in which the billionaire criticized the attitude of financial regulators.
After the speech, the authorities called off Ma, who has not appeared in public since the fiasco of the ant group.
“The subliminal political message is that no company or individual has the right to challenge the Communist Party regardless of its size,” Richard McGregor of the Lowy Institute in Sydney told AFP.
Fear of online credits
At 56, Ma officially retired from his group after his retirement last year. But he retains an undeniable influence on Alibaba and Ant Group through the portfolio of stocks he owns.
The public powers are concerned about the power of technology groups and more particularly about the incursions into the online credit sector, where they avoid the rules of prudence that public banks have to observe.
The Chinese press has echoed concerns about the risks of financial turmoil in regards to Alibaba and its great rival Tencent.
The investigation against Alibaba “is an important measure for our country to strengthen antitrust oversight in the internet sector and promote a healthy long-term development of the digital economy,” writes the People’s Daily, an organ of the Communist Party in power.
A meeting of the regime’s top leaders last week around President Xi Jinping called for “firmly opposing the monopolies.”
Proof of the concern of the public authorities with Alibaba is that the group received a fine of 500,000 yuan (62,000 euros) last week for not having reported an acquisition.
Alibaba had not responded to questions from AFP on Thursday for the preparation of this note.