China Opens Anti-monopoly Probe Into Alibab; Summons Ant Group

(RTTNews) - Chinese online retail giant Alibaba Group Holding Ltd. is facing a domestic investigation for suspected monopolistic behavior, multiple reports said. The e-commerce giant's fintech affiliate Ant Group Co. has also been summoned to meet in coming days over financial regulations.

Following the news, Alibaba shares were losing around 8 percent in Hong Kong trading, and 3 percent in the extended trading on NYSE.

China's State Administration for Market Regulation has launched a probe into Alibaba's "choosing one from from two" practice. Under this, merchants are required to sign exclusive cooperation agreements that prevent them from offering products on rival platforms.

The investigation is part of the country's efforts to crack down monopolistic behavior in its internet space. Regulators earlier had warned Alibaba about its practice.

During its 2020 11.11 Global Shopping Festival, from November 1 to 11, Alibaba generated $74.1 billion in gross merchandise volume, an increase of 26% from last year. The company then had said it would continue to focus on developing digital infrastructure in the service of empowering merchants of all sizes to find a path to success in the digital economy.

In August, the company had said that its domestic core commerce business fully recovered to pre-COVID-19 levels across the board, while cloud computing revenue grew 59% year-over-year.

In a separate development, People's Bank of China reportedly said that the country's financial regulators will meet with Ant Group in the coming days. They aim to guide the company to implement financial supervision, and fair competition. They will also seek to protect the legitimate rights and interests of consumers.

In November, Ant's planned $37 billion initial public offering in Shanghai and Hong Kong, which was supposed to be the world's largest IPO, was suspended, citing that the company might not meet listing qualifications or disclosure requirement. Billionaire Jack Ma's Alibaba holds about 33 percent ownership in Ant Group.