Alibaba is facing an anti-monopoly probe by Chinese regulators
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| The regulator seems to have taken issue with Alibaba’s “choosing one from two” policy, in particular |
China’s market regulator has opened an investigation into Alibaba’s “suspected monopolistic conduct.” The State Administration for Market Regulation has posted a short statement on its website announcing the anti—monopoly probe. The regulator seems to have taken issue with Alibaba’s “choosing one from two” policy, in particular. According to TechCrunch, that policy forces merchants to sell on Alibaba’s platforms exclusively and prevents them from selling on rival e-commerce websites, such as JD.com and Pinduoduo.
This is just one of the regulator’s latest steps to curb anti-competitive behavior among local tech companies. Back in November, it introduced new draft laws that would restrict companies’ data collecting activities, along with other rules it says are meant to protect consumers. South China Morning Post also reports that the regulator has summoned Alibaba, JD.com, Tencent, Meituan, Pinduoduo and Didi Chuxing for a meeting on Tuesday to discuss a set of nine rules they need to follow. These tech giants will be “strictly prohibited to sell products below cost with the purpose of squeezing out competitors or seeking monopoly positions,” the regulator reportedly said.
Alibaba isn’t the only Jack-Ma owned company under scrutiny, as well. As the Wall Street Journal noted, Chinese regulators also blocked the $34 billion IPO of Ant Group, the Jack Ma—founded Alibaba affiliate that owns digital payment service Alipay. A Bloomberg Businessweek piece discussing the government’s crackdown on his empire says Ma’s companies are in crisis mode, and his top execs have become part of a task force that deals with watchdogs on a daily basis.
Of course, Alibaba is far from the only tech giant that’s currently facing anti-monopoly and anti-trust probes. Google, for one, was hit with its third anti-trust lawsuit for the year in mid-December and might face another one in early 2021. The Federal Trade Commission also recently filed antitrust charges against Facebook, accusing it of anti-competitive behavior for acquiring Instagram and WhatsApp.