The State Administration for Market Regulation of China announced on Thursday (December 24) that it has initiated an investigation into the suspected monopolistic conduct of Alibaba Group Holdings Limited in accordance with the law.
According to the bureau, based on the reported information, it is investigating Alibaba Group’s implementation of monopolistic activities such as “choose one out of two”.
Alibaba Group immediately responded on its official Weibo and will actively cooperate with the investigation by the regulatory authorities. At present, the company’s business is normal.
On Thursday morning, the Hong Kong stock Alibaba stock price fell by nearly 9%. Earlier, Ant Group, another trillion-level enterprise created by Alibaba founder Jack Ma, also suffered repeated setbacks in front of China’s regulatory level, and had to cancel the plan to go public in Shanghai and Hong Kong at the same time.
Why was it investigated?
The currently known information mainly comes from a report by the state-run Xinhua News Agency, which stated that the reason for the investigation was suspected monopolistic behavior such as “choosing one of two” by Alibaba Group.
The controversy of “choose one out of two” has a long history. After the “Double Eleven” online promotion in 2015, another Chinese e-commerce giant JD.com reported to the regulatory authorities that Alibaba’s Tmall mall required merchants to choose only between Tmall and rival JD.com. .
In 2019, JD.com sued Alibaba for abusing its dominant market position. Later, other e-commerce platforms such as Pinduoduo and Vipshop also joined the battle and applied to join the lawsuit as a third party.
It is worth noting that the important shareholder behind Jingdong and Vipshop is Tencent Group. In fact, in the “3Q war” between Tencent Group and Qihoo in 2014, users were required to “choose one of the two” and uninstall their own QQ or rival 360. Qihoo therefore sued Tencent for abusing its dominant market position. However, Qihoo lost the case in both trials.
It is still difficult to judge why Alibaba was filed for investigation due to the “choice of two” behavior at this time.
However, this is not the first time Alibaba has been under antitrust investigation this year. On December 14, the State Administration for Market Regulation imposed a fine of RMB 500,000 on the case of Alibaba’s acquisition of Intime’s equity for failing to declare illegal implementation of the concentration of operators. Punishment.
On the same day that Alibaba was determined to be investigated, the official Chinese media “People’s Daily” issued an article stating, “This investigation does not mean that the state’s attitude towards the economic encouragement and support of the platform has changed. It is precisely for better regulation and Develop platform economy, guide and promote its healthy development.”
Ants are interviewed again
To make matters worse, on the same day, the People’s Bank of China announced that the four major regulatory authorities will once again meet with another giant Ant Group in the Ali department.
The Ant Group immediately stated that it will study and strictly abide by the requirements of the supervisory department after receiving the interview notice from the supervisory department, and complete the implementation of relevant work without compromise.
At the beginning of November, Ant Group was ready to go public in Shanghai and Hong Kong at the same time. It may become the largest IPO in global history. On November 2, the four major regulatory agencies collectively interviewed Ant Group executives including Jack Ma. ; On the 3rd, the Shanghai Stock Exchange announced its decision to suspend the listing of Ant Group.
In just a few days, Ant Group, China’s largest online financial company, experienced the pain of falling from a height.
Not only that, the Ant Group will also face the constraints of the latest regulatory requirements. In the future, Ant must think about and adjust its business model to comply with the new regulatory requirements. Even if it is finally listed, its valuation will inevitably affect its valuation.
Internet economy anti-monopoly wave
Including Alibaba and Ant Group, the entire Chinese Internet economy is facing antitrust pressure.
The Politburo meeting of the CPC Central Committee held on December 11 clearly proposed for the first time “strengthening anti-monopoly and preventing the disorderly expansion of capital.” The subsequent CPC Central Economic Work Conference also specifically mentioned relevant anti-monopoly issues.
Wang Jun, chief economist of Zhongyuan Bank, said, “This signal is very strict and obvious. The meaning of’beating’ is very strong, and the hierarchy is getting higher and higher. The senior management has been calling for innovation, but some capitals are not focused on innovation. I want to evade supervision and harvest leeks.”
The official media also pointed out the community e-commerce boom among Internet companies-“Internet giants with massive amounts of data and advanced algorithms should have more responsibility, more pursuits, and more actions in technological innovation. Merely thinking about the flow of a few bundles of cabbage, a few catties of fruits, the sea of stars of technological innovation, and the infinite possibilities of the future are actually even more exciting.”
“The giants are all buying food in the community. In fact, they use their own monopoly on traffic and ecology, rely on subsidies to gain market position, and finally make money by raising prices.” Tang Jianwei, chief researcher of the Bank of Communications Financial Research Center, said that this is very important for China’s technology. Progress is not helpful. Funds must be invested in innovation and in basic scientific research. This is the key to China’s future technical problems.
Outside of China, the US Federal Trade Commission (FTC) has jointly sued Facebook in more than 40 states, claiming that it violated antitrust laws and should be split. The case is still under trial.