Jack Ma’s online e-commerce and fintech empire is coming under increasing pressure from central government authorities in the wake of the shelving of its potentially record-breaking IPO at the start of November.
On 24 December the State Administration for Market Regulation (SAMR) announced via its official website the launch of an investigation into suspected monopolistic conduct by Alibaba “in response to reports.”
SAMR specifically mentioned Alibaba’s use of “select one of two” (二选一) practices – a highly contentious form of commercial conduct in China’s e-commerce sphere which involves platforms requiring that cooperative partners or vendors work with them exclusively.
The People’s Bank of China (PBOC), being the Chinese central bank, has also announced that it summoned Jack Ma’s fintech platform Ant Group for “regulatory discussions” to be held within the next several days with a slew of other top regulators, including the China Banking and Insurance Regulatory Commission (CBIRC), the China Securities Regulatory Commission (CSRC) and the State Administration of Foreign Exchange (SAFE).
The discussions will be for the purpose of “expediting and guiding Ant Group to implement requirements with regard to financial regulation, fair competition and the protection of the lawful rights and interests of consumers, and to standardise the management and development of its financial operations, in accordance with the principles of the market and the rule of law.”
Ant has responded by stating that it will “earnestly study and strictly abide by the requirements of regulatory departments, and uncompromisingly perform the implementation of related work.”
This marks the second time in the past few months that the Chinese central government has summoned Ant Group executives for regulatory discussions, with the first occasion being in early November.
Regulatory discussions held at the start of November culminated in the shelving of Ant Group’s Hong Kong and Shanghai IPO that was originally scheduled for 5 November, and expected to raise a record-breaking USD$34.4 billion.
China’s ex-finance minister Lou Jiwei (楼继伟) recently said that China needed to prevent digital finance platforms from becoming “too big to fail,” with specific reference to Ant Group’s scuppered IPO.