China’s State Administration for Market Regulation Investigates into Alibaba’s Alleged Act of Monopoly

Alibaba is suspected to be stopping its merchants from using the rival platforms.

As per the on-going investigation into the Chinese e-commerce giant, the company has committed to regulated development. According to the regulatory authorities, Alibaba is suspected to be stopping its merchants from using the rival platforms such as and Pinduoduo, so that they sell through them exclusively. 

The Chinese e-commerce leader has been quite cooperative with the investigating authorities and has been available to answer and provide all relevant information. The CEO of Alibaba Group Holding, Daniel Zhang Yong, states that he sees regulated development as the future of the internet industry. 

Alibaba is a major beneficiary of the internet industry in China, and having to take this step can massively help to benefit the stakeholders of their firm. 

“We firmly believe that regulated development is the future, and only with self-discipline can an industry prosper. It is a vigorous and orderly regulatory system and platform economy ecosystem that can benefit all stakeholders.” – Zhang Yang 

According to the investigation, Alibaba is asking merchants who sell through their platforms- Taobao and Tmall – to commit to not sell through any of their competitors

The investigation began by the China’s State Administration for Market Regulation on Thursday, 24th of December, 2020. However, all members of the firm have cooperated with the authorities throughout and complied with all necessary regulatory requirements. 

On the other hand, other parties involved and affected as per this alleged act of monopoly – and Pinduoduo – didn’t come forward to give any comments. Mr. Jack Ma, the co-founder and executive chairman of the Alibaba Group preferred to stay away from the scene as well. 

READ: Successful IPOs of 2020 – Airbnb and DoorDash witnesses a kickstart

The decision to form a monopoly is mainly based upon the worldwide control of internet platforms Google and Facebook. The Chinese government has succeeded in keeping themselves away from all toxicity by creating their own platforms. As much as the government was able to control what their public read and had access to, these platforms had much greater and deeper control into peoples’ lives. 

Whilst confirming the accusation, the company also stated that their business plan for the future has got nothing to do with interrupting business for the commerce economy of China. Instead, the Chinese e-commerce giant stated, “business operations remain normal.”

As a result of this investigation the Ant Group – Alibaba’s financial sister company – was also expected to cooperate and provide all necessary information to the authorities. The sister company made sure to stand by the company’s vow and kept themselves available for all kinds of supervision

China’s State Administration of Market Regulation stated that they wanted to meet with Ant Group majorly to supervise the company on how to financially operate in a way which is market-oriented. As per the Regulation, considering consumer rights and needs is highly important, which currently was not being followed by the company. Other regulators which were to take part in this meeting included China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, and State Administration of Foreign Exchange. 

Ant Group and Alibaba also confirmed in the investigation that a week before the authorities contacted them, their public offering abruptly got suspended. This was going to be one of their major offerings going forward in Hong Kong and Shanghai. However, they now suspect that it is because of the planned investigation in place, that the public offering got suspended. 

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