Alibaba Antitrust Probe: China Investigates E-commerce Giant

China's primary regulatory body for markets has launched an investigation into Alibaba concerning potential anti-competitive behaviors within the e-commerce company, representing the newest action by Beijing to regulate the nation’s rapidly growing internet corporations.

The State Administration for Market Regulation announced on Thursday through a concise statement that it is examining Alibaba’s “choose one of two” practice, which compels vendors to list their products solely on Alibaba’s platforms and refrain from using competing sites like JD.com and Pinduoduo.

“Alibaba Group confirms receipt of a notification from the State Administration for Market Regulation regarding the commencement of an investigation into the Company under the Anti-Monopoly Law. Alibaba will fully collaborate with regulators throughout this investigation,” Alibaba stated in a public announcement.

“The Company’s standard business activities are continuing without disruption.”

Alibaba’s stock price experienced a decline of over 8% on the Hong Kong Stock Exchange on Thursday.

Also on Thursday, the state news agency Xinhua reported that Ant Group, a subsidiary of Alibaba, had been requested to meet with a coalition of financial regulators to discuss its “compliance” efforts. Ant, the operator of the widely used Alipay digital wallet and a facilitator connecting financial institutions with customers, has committed to implementing measures to reduce financial risks following the unexpected suspension of its large-scale initial public offering last month.

“Ant Group received a notice to attend a meeting with regulators today. We will carefully review and fully adhere to all regulatory stipulations, dedicating ourselves to the completion of all associated tasks,” the company communicated in a statement.

Certain observers believe this increased scrutiny is overdue for China’s major internet companies, which have benefited from a comparatively lenient regulatory landscape. An editorial published in the official newspaper of China’s governing Communist Party characterized the Alibaba case as a “notable advancement” in China’s anti-monopoly regulations for the internet sector. The article further suggested that the investigation into Alibaba “will contribute to re-establishing order and fostering the sustained, sound advancement of the platform economy,” thereby alleviating concerns that stricter rules might negatively impact the industry.