China’s market regulator announced Today that it had opened an anti-monopoly investigation into e-commerce giant Alibaba, ratcheting up the government’s scrutiny of one of the world’s most valuable internet companies, according to Forbes report.
The investigation in China coincides with efforts by the United States and European Union to curb the power of Western internet giants such as Google and Facebook.
Moreover, Alibaba holds a strong position in online shopping in China. It runs the Taobao Marketplace, an online bazaar where merchants set up electronic stands to sell to customers. Alibaba’s Tmall platform caters to larger Chinese and global brands. Alibaba makes money by hosting the marketplaces and charging vendors for services.
China Opens Antitrust Investigation with Alibaba Group
Later, China fined Alibaba Group Holding and a Tencent Holdings Ltd. unit 500,000 yuan ($76,500), for failing to seek approval before increasing its stake in department store chain Intime Retail Group Co. to 73.79% in 2017, according to CNBC report issued on Dec.
Moreover, Beijing unveiled draft regulations that establish a framework for curbing anti-competitive behavior such as colluding on sharing sensitive consumer data, alliances that squeeze out smaller rivals and subsidizing services at below cost to eliminate competitors. Shares in Alibaba and Tencent extended losses and closed down more than 2.5% on Dec.15, according to Bloomberg.
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