China has recently started an investigation into the alleged monopolistic practices over at Alibaba Group Holding Ltd. and even summoned the affiliate Ant Group Co. towards a high-level meeting regarding financial regulations. This then escalated scrutiny over the known twin pillars of China's popular Jack Ma's internet empire.
Alibaba antitrust lawsuit
According to the story by Bloomberg, the official State Administration for Market Regulation is now investigating Alibaba, the top known antitrust watchdog said in its statement without revealing further details. Regulators that include the central bank as well as the banking watchdog will then separately summon the affiliate Ant to a certain meeting intended to drive home the increasingly stringent financial regulations.
This now poses a threat towards the growth of the world's reportedly biggest online financial services firm. Ant stated on its official WeChat account that it will supposedly study and comply along with all of the requirements, also reported by The New York Times.
Once it is hailed as drivers of general economic prosperity and also symbols of the country's very own technological prowess, Alibaba and its rivals like the Tencent Holdings Ltd. now face increasing pressure coming from regulators after they had amassed hundreds of millions of users and also gained influence over the almost everyday aspect of regular life in China. Shares of SoftBank Group Corp., the largest shareholder of Alibaba, erased gains in order to trade as high as 2.7% lower in Tokyo. Hong Kong's Alibaba stock slid by 3.4%/
China rolls out new anti-monopoly regulations
Investors are now divided over the particular extent towards which Beijing will pursue Alibaba, which is known as Asia's largest corporation just after Tencent, and its other compatriots as Xi Jinping's government now prepares to roll out a particular raft of new anti-monopoly regulations. The country's own leaders have stated only little about their plans to clamp down or why they only decided to act now.
The draft rules that released in November actually gave the government unusually wide latitude for it to rein in certain tech entrepreneurs like Ma who had just recently employed quite an unusual amount of freedom in order to expand their own empires. The Alibaba co-founder has reportedly vanished from the public view ever since Ant's own initial public offering suddenly got derailed.
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China's anti-monopoly rules
As of this early December, with his massive empire under certain regulatory scrutiny, the man that most clearly identified along with the meteoric rise of China Inc. was actually advised by the government to remain in the country, according to a certain person that was familiar with this particular matter stated.
The anti-monopoly rules now reportedly threaten to upset the status quo along with a wide range of potential outcomes all coming from a certain benign scenario of certain fines towards a break-up of certain industry leaders. Beijing's own diverse agencies now all appear to be in coordination with their efforts. This is reportedly a bad sign for the entire internet sector.
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Written by Urian Buenconsejo
