fbpx

China Opens Antitrust Investigation Into Alibaba

0

The new investigation could be a much bigger deal. China’s antimonopoly law allows for a maximum fine of 10 percent of a company’s sales from the previous year, which in Alibaba’s case would be billions of dollars.

In its brief statement announcing the inquiry on Thursday, the State Administration for Market Regulation named only one specific form of anticompetitive conduct by Alibaba that it would look into: exclusivity agreements, which in Chinese are described using a phrase that translates as “choose one of two.”

Large e-commerce sites in China have for years been accused of blocking merchants who sell on their platform from selling on others, particularly during big sales events such as the annual Singles’ Day. One of Alibaba’s main rivals, JD.com, has fought the company in court over the practice.

Galanz, a Chinese appliance maker, made headlines last year when it accused Tmall of suppressing its products in the platform’s search results after the brand teamed up with a rival e-commerce company, Pinduoduo. Tmall denied the accusations, according to news reports at the time.

Cutthroat practices of this sort have long been common on the Chinese internet. Tencent, for instance, will block people using its popular WeChat messaging service from directly opening links to Alibaba’s Taobao site — the equivalent of Facebook blocking links to Amazon within its Messenger app.

“On a very, very macro level, maybe it’s just because these companies are not competing globally,” said Rui Ma, an investor and China tech analyst. Because the Chinese internet giants are jostling for advantages mostly within a single market, “it seems like more of a zero-sum game,” she said.

Political insiders and investors in China have speculated for years that the nation’s leader, Xi Jinping, might be tempted to move against Mr. Ma, worried that his influence was a growing affront to the Communist Party.

[ad_2]

Source link

You might also like