China's antitrust watchdog has begun a probe into tech giant Alibaba Group over alleged anti-competitive practices.
The State Administration of Market Regulation has kicked off investigations into the Alibaba Group, laying claim that the company has been involved in monopolistic conduct such as "forced exclusivity" by requiring e-commerce merchants to pick only one platform as their exclusive distribution channel, according to the South China Morning Post.
In a statement, Alibaba said it would "actively cooperate with the regulators on the investigation", adding that the "company business operations will remain normal".
Last month, State Administration for Market Regulation slapped Alibaba and Tencent-backed China Literature with fines for failing to properly report past acquisitions deals for clearance.
Alibaba and China Literature were each fined 500,000 yuan ($76,464), the maximum under a 2008 anti-monopoly law, reported Reuters.
The acquisition deals that Alibaba were fined for included its $692 million investment in Intime in 2014 and the e-commerce giant's $2.6 billion bid in 2017 to privatise Intime, the report said.
Meanwhile, China Literature was fined for failing to report its 2018 New Classics Media acquisition.
Separately, Alibaba Group's financial services arm Ant Group, the owner of Alipay, has been summoned by China's central bank to meet with financial regulators to discuss the company's regulatory compliance, the South China Morning Post said.
"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 fulfil all related work," Ant Group said in a statement.
In November, Chinese regulators called off Ant Group's IPO was after concluding that listing on the Shanghai stock exchange may have no longer met regulatory and disclosure requirements due to "recent changes in the fintech environment".
This then prompted Ant Group to also suspend its Hong Kong listing.
"Ant Group was notified by the Shanghai Stock Exchange today that our A share listing plan on the Shanghai Stock Exchange would be suspended. Consequently, Ant has decided that the concurrent H share listing plan on the Hong Kong Stock Exchange shall also be suspended," the company said in a statement at the time.
The crackdown on Alibaba Group's operations by Chinese regulators follow founder Jack Ma's frank speech he gave during the Bund summit in Shanghai in October where he criticised the country's overbearing regulation and the state's dominance over the banking system.
"Good innovation can coexist with regulations, but not regulations in the old-fashioned way. We cannot manage an airport the way we manage a train station, nor can we manage the future the way we manage the past," Ma said, according to a transcript.
He continued saying: "We must do away with the 'pawnshop' mentality within the financial industry today. We must rely on credit system development ... I have found that the pawnshop mentality is a serious problem in China and has affected a lot of entrepreneurs. This becomes extremely serious when entrepreneurs have to pledge all their assets. They are under huge pressure, and what they do becomes distorted."
Alibaba Group reported relatively strong second-quarter financial results in November. For the period ending September 30, net income came in at $3.9 billion.
MORE FROM ALIBABA
- Alibaba Cloud turns on new hyperscale data centres in China
- Alibaba's 11.11 lands big sales, attracts US companies selling to China
- Alibaba expands supermarket footprint with Sun Art investment
- Alibaba smashes 2019 11.11 record by posting $56b in 2020 GMV with 23 hours to go
- Alibaba to run double 11.11 online shopping events starting November 1
- Olympic Broadcasting Service aims to set sport streaming benchmark with Alibaba
- Alibaba unveils Cloud 2.0, Wuying cloud computer, and Xiaomanlv logistics robot