China’s e-commerce titan Alibaba hit with antitrust probe

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China’s top market watchdog has begun a probe into Alibaba over alleged anti-competition practices at the e-commerce firm, the latest of Beijing’s efforts to curb the country’s ever-expanding internet titans.

The State Administration for Market Regulation said Thursday in a brief statement that it is investigating Alibaba over its “choosing one from two” policy, in which merchants are forced to sell exclusively on Alibaba and skip rivaling platforms JD.com and Pinduoduo.

“Today, Alibaba Group has received notification from the State Administration for Market Regulation that an investigation has been initiated into the Company pursuant to the Anti-Monopoly Law. Alibaba will actively cooperate with the regulators on the investigation,” Alibaba said in a statement.

“Company business operations remain normal.”

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Alibaba’s shares tumbled more than 8% on the Hong Kong Stock Exchange on Thursday.

On the same day, state-backed Xinhua reported that Ant Group, Alibaba’s affiliate, has been summoned by a group of finance authorities to discuss its “compliance” work. Ant, which operates the popular Alipay e-wallet and works as an intermediary for financial services and customers, has pledged to take measures to curb debt risks after Chinese authorities abruptly called off its colossal initial public offering last month.

“Today, Ant Group received a meeting notice from regulators. We will seriously study and strictly comply with all regulatory requirements and commit full efforts to fulfill all related work,” the firm said in a statement.

Some argue that the clampdown is a long time coming for China’s internet giants, which have been allowed to grow under a relatively loose regulatory environment. The Alibaba case is a “significant step” in China’s anti-monopolistic regulations on the internet industry, said an opinion piece published in the official newspaper of China’s ruling Communist Party. Assuaging worries that stricter regulations could deal a blow to the industry, the piece said the probe into Alibaba “is beneficial to restoring orders and promoting long-term, healthy development of the platform economy.”