There have been speculations worldwide about why Chinese regulators have started taking action on China’s largest private Internet company Alibaba and its financial business arm Ant Group. China’s market regulator said on Thursday that it had initiated an investigation against Alibaba for attempts to monopolize the market.
Alibaba has been accused of preventing sellers from selling their goods on other Internet platforms. On Thursday, the Central Bank of China and three other financial regulatory agencies announced an increase in surveillance over the ANT group.
Both Alibaba and Ant Group are Jack Ma’s companies, considered to be China’s most famous businessmen. Jack Ma was until recently considered an icon in China, but for some time, the Chinese government has been following him. Last month, the IPO (Initial Public Issue) of ANT Group was banned by the government regulator. Now action has been initiated on Alibaba.
On Thursday, the People’s Daily of the Communist Party of China published an article in support of this. It said that this (action) is an important step to prevent monopoly on the Internet. This will have a beneficial impact in terms of healthy development of Internet platforms.
Action on Alibaba and Ant Group has started at about the same time as the US and Europe companies such as Google and Facebook have taken steps to crack down on them. Experts have drawn attention to the commonality that exists in all these actions. According to him, there was growing concern over the growing strength of high-tech companies over the years. These companies have gradually increased their dominance in business, expression and advertising.
Many large Internet companies have emerged in China over the decades. In China, he is considered a symbol of technological advancement of the country. Critics say that as these companies grew and became dominant, the Chinese government had turned its back. As a result of this, the penetration of these companies in the lives of the common people of China continued to grow. Apart from Alibaba and Ant, there are many big internet companies in China today.
Among those companies are JD.com and Pineduoduo in digital commerce; Tencent in gaming, social media and mobile payments; BiteDans in Short Form Entertainment; Meituan etc. dominates in food delivery. All these companies are listed on the New York and Hong Kong stock exchanges.
According to experts, venture capitalists and investors from all over the world have made a lot of profit by investing money in them. Now this is the first time Chinese regulators have clamped down on a big internet company. This has started to affect his business. On Thursday, Alibaba shares fell sharply.
Frank Fine, an American expert on monopoly and data privacy, told the New York Times that actions against big Internet companies in the US, China and Europe could bring about major changes. For example, there have been allegations on large commerce sites in China that they do not allow merchants to sell their goods on other platforms.
Alibaba’s company has taken JD.com to court regarding this issue. Some time ago, Tencent Company was accused of not allowing Alibaba’s Taobao site to open directly on its popular app WeChat. There have also been many more such cases.
The law against monopoly in China was enacted in 2008. Till now it was used against foreign companies only. In 2015, the US computer chip maker had to pay a fine of $ 97 million after taking action under the same law.
Now this is the first time that a big Chinese company has come under this law. The market regulator said last month that Alibaba and two other companies had not reported to them recently that they had bought new companies. For this, these companies were fined 75 thousand dollars, but now the action has started, in which Alibaba can be fined much larger.