Alibaba Group to be investigated over suspected monopolistic practices

Alibaba Group to be investigated over suspected monopolistic practices

An investigation has been launched by China's market regulator – the State Administration for Market Regulation on Alibaba Group Holdings for "suspected monopolistic conduct."

Moreover, in order to ensure financial supervision, fair competition and protection of consumers' interests, the State Administration of Foreign Exchange, China Banking Regulatory Commission, China Securities Regulatory Commission and The People's Bank of China have called Alibaba's financial affiliate Ant Group for supervisory and guidance talks.

It has been alleged by the State Administration for Market Regulation that Alibaba has violated exclusivity agreements or "choosing one of two" practices that require vendors to sign agreements for exclusive co-operation and prohibits them from selling products on rival platforms and is currently probing the same.

The Chinese Government has been trying to prevent monopolistic and anti-competitive practices for improving the socialist market economy system and fostering development. China's national market regulator released guidelines in November to "prevent and stop monopolistic behaviors" by internet giants such as collecting unnecessary data from consumers, colluding to eliminate small rivals, and making it difficult for users to switch other platforms.

Alibaba Group has said that it will actively co-operate with the regulators and the company's business will operate normally for the time being. Similarly, Ant Group has also agreed to comply with the requirements and that it will diligently study the regulatory departments' requests.

If the regulators find against Alibaba, penalties under China's anti-monopoly law can be up to 10% of the company's turnover from the previous year.