[NNA] Chinese authorities intensify pressure on Alibaba… to investigate antitrust activity

On the 24th, the China State Market Supervision and Management Administration (SAMR) announced on the 24th that it will initiate an antitrust investigation of the Alibaba Group, China’s largest e-commerce company.(阿里巴巴集団) An administrative guidance for Ant Group, an affiliate of Alibaba Group, is also planned. The Chinese government is wary of the market monopoly of large online service providers, and the authorities’ pressure on Alibaba, which has strong influence, is increasing.

SAMR has announced that it is investigating Alibaba’s monopoly. It is said that Alibaba has been charged with forcing’a two-way option’ to restrict opening to competitors’ shopping malls against businesses selling products in its online shopping malls.

In response, Alibaba issued a statement saying, “We will actively cooperate in the investigation of the authorities. Currently, the business is performing normally.”

On the other hand, the People’s Bank of China (Central Bank) also said that the People’s Bank, the Bank of China Insurance Supervision and Management Committee (Eunbo Supervisory Board), the China Securities Supervision and Management Committee (Increase and Decrease Association), and the National Foreign Exchange Management Bureau said, , Provide administrative guidance to realize fair competition and protection of consumers’ rights and interests.”

Ant operates an electronic payment service called Alipay. In response to the People’s Bank’s announcement, Ant issued a statement stating, “I received a notice from the authorities today to inform them of administrative guidance. I will study with a serious attitude, and will thoroughly comply with the demands of the supervisory authorities.”

Ant was scheduled to raise an all-time high of $35 billion (about 3,620 billion yen) through listing on both the Shanghai and Hong Kong exchanges on November 5, but it was postponed shortly before. Just before the listing, four institutions, including the People’s Bank and the Association for the Increase and Reduction, the Eunbo Committee, and the National Foreign Exchange Bureau, called Jing Xian-dong, Chairman of Ant Group and Alibaba’s founder Ma Yun, to provide administrative guidance. According to Ant, it has been pointed out by the authorities that “there is a possibility that the listing requirements may not be met.

Ant is significantly increasing its income in the financial services sector, such as microloans using credit information such as Alipay’s payment information. For Ant to be listed, the timing of listing has become very uncertain, as the Eunbo Board of Directors and People’s Bank announced new regulations on online microfinances announced on November 2.

■ Clear attitude to strengthening regulations

Alibaba is recording enormous profits every year during China’s largest online sales event’Shuangshui’. Alibaba’s SOPS this year’s transaction amount reached a record high of 498.2 billion yuan (about 7.9 trillion yen). Although retail sales through online shopping malls account for a large portion of the entire business, the company is actively developing various IT services derived therefrom. Electronic payments, which are indispensable for online shopping, are run by Ant, Alipay, which has 1 billion users worldwide.

As Alibaba is expanding its business like this, the Chinese government has clearly expressed its attitude to strengthen regulations on large Internet service companies.

On the 14th, SAMR imposed a fine of 500,000 yuan for the violation of the antitrust law on the three affiliated companies of Alibaba and Tencent (騰訊控股). Fines for violating reporting obligations in the past acquisition of a company. SAMR said the purpose of this fine is to prevent monopolies through mergers and acquisitions of large online shopping malls and to promote sound development across the industry.

The Chinese Communist Party and the central government are one of the important missions of the Central Economic Cooperation Conference to determine the 2021 economic operation policy held on the 16th and 18th. With large online shopping mall companies in mind, “To prevent monopoly and “Strengthen the measures,” he expressed. He also emphasized that it will strongly prevent monopolies and unfair competition by restructuring and strengthening regulations such as platform company monopoly, data collection and use management, and consumer rights protection. It also revealed that financial innovation should be promoted under the premise of careful supervision.

In addition, in November, SAMR published the draft “Platform Economy Antitrust Guidelines” and is currently in the process of listening to public opinion. The draft restricts platform companies from opening stores on other platforms to vendors. It is contained in prohibited content.

The People’s Daily (Internet Edition), an agency of the Communist Party, responded to the SAMR’s Alibaba investigation on the 24th, “This is an important step for China to strengthen antitrust supervision in the online sector, helping to standardize the industry order and promote the sound development of the platform economy. It will be,” he posted a comment evaluating the government’s response.