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Chinese Regulators Open Investigation Into E-Commerce Giant Alibaba

China's market regulator announced Thursday that it had opened an investigation into the  e-commerce giant, Alibaba, for alleged anticompetitive activities.
China's market regulator announced Thursday that it had opened an investigation into the e-commerce giant, Alibaba, for alleged anticompetitive activities.

China's market regulator announced Thursday that it had opened an investigation into the country's e-commerce giant, Alibaba, for alleged anti-competitive activities.

In a short statement issued Thursday, China's State Administration for Market Regulation said that the probe is focusing on allegations that the company forces merchants on its website to sign exclusive cooperation agreements, preventing them from selling products on rival platforms.

A spokesperson for Alibaba said the company "will actively cooperate with the regulators on the investigation. Company business operations remain normal."

The inquiry into Alibaba comes more than a month after regulators for the Shanghai Stock Exchange abruptly suspended an initial public stock offering for Alibaba's sister company, Ant Group, citing "major issues."

The Chinese financial company was set to mark the world's largest IPO, which was expected to raise an estimated $37 billion and boost Ant's market value to more than $300 billion.

The sudden suspension of the offering also came after Ant Group's chairman and majority owner, Jack Ma, who is also a co-founder of Alibaba, publicly disparaged the Chinese financial system. Speaking during a finance conference in Shanghai in October, Ma dismissed Chinese banks as "pawnshops," and said they were giving loans out to companies "that do not need money."

"As a result, many good companies have turned into bad companies," he said.

Financial regulators also said that they will meet with Ant Group in the coming days.

China has taken steps in recent weeks to clamp down on its major tech companies' alleged anti-competitive practices. In November, regulators announced proposed rules focused on combating monopolistic activities by internet companies.

These actions coincide with moves by government regulators in the U.S. to more closely scrutinize the business practices of major social media companies and other tech giants.

Attorneys general in dozens of states have filed three antitrust lawsuits against Google in less than two months, claiming in part that the company's popular search engine boosts results for its own products over competitors.

The U.S. Federal Trade Commission also opened an inquiry into user data collection practices of several social media companies. Amazon.com, TikTok owner ByteDance, Discord, Facebook, Reddit, Snap, Twitter, WhatsApp (also owned by Facebook) and YouTube were sent orders by the FTC on Dec. 14 to provide details on their data collection and advertising practices.

NPR's John Ruwitch contributed to this story.

Copyright 2021 NPR. To see more, visit https://www.npr.org.