China launches antitrust probe into Alibaba

Chinese regulators announced Thursday they were launching an anti-monopoly investigation into e-commerce giant Alibaba.

The State Administration for Market Regulation said in a statement that they were investigating Alibaba for "suspected monopolistic practices." The market regulator said it was especially looking into Alibaba's policy of "choose one of two," which requires business partners to avoid working with competitors.

Regulators added that they would also hold "supervisory and guidance" talks with Alibaba's financial services subsidiary Ant Group, just weeks after its record-breaking IPO was halted by Beijing.

Ant Group released a statement saying it would "diligently study and strictly comply with regulatory departments' requests."

Alibaba stocks fell 8% in Hong Kong trading after the announcement.

Giants expand

Chinese leaders previously said they would beef up their anti-monopoly enforcement. They were especially concerned about Alibaba and other major internet companies that are expanding into finance and health care.

Ant Group became massive thanks to its main product Alipay, an online payments platform that has become entrenched in the Chinese economy. It expanded into offering loans, credit, investments and insurance to hundreds of millions of people and small businesses.

State media has also called for tighter oversight. State newspaper People's Daily released a commentary Thursday, saying, "this is an important measure for our country to strengthen anti-monopoly supervision in the internet sector, which is conducive to…promoting the long-term and health development of the platform economy."

Jack Ma, Alibaba founder and China's richest man, previously showed his frustration with China's financial system. Ma called state-owned banks "pawn shops" in an October speech that led him to be summoned for regulatory talks just before Ant Group's IPO was suspended.

kbd/aw (AP, AFP)