China Opens Antitrust Investigation Into Alibaba

“This is an important step in strengthening anti-monopoly oversight on the Internet,” said the article posted on the newspaper’s website Thursday morning. “This will have a positive impact on regulating an orderly sector and promoting long-term healthy development of platforms.”

Political insiders and investors in China have speculated for years that national leader Xi Jinping would be tempted to crack down on Alibaba and Mr. Ma. They feared that their influence could increasingly offend the Communist Party and undermine control over capital markets and the Internet. However, until recently, Chinese regulators had been cautious.

Two recent party leadership meetings indicated that Mr. Xi was considering action.

The Politburo, a council of the party’s top 25 officials that meets every month or so, called for stronger anti-monopoly efforts at its meeting this month, although the official statement from the meeting did not identify any company or sector. This call was followed a few days later by an even clearer demand from the party leadership’s annual meeting on economic policy, which suggested that companies with Internet platforms would be subject to closer scrutiny.

The Chinese government “supports the innovative development of platform companies and the improvement of their international competitiveness,” read the official summary of the meeting. “At the same time, the development must be regulated by law and the digital rules improved.”

The supervisory authorities should “take decisive action against monopolies and inappropriate competitive behavior”, it says in the summary of the meeting.

Mr Ma’s remarks on financial regulation, held at a conference in Shanghai in October, appear to have helped catalyze the official backlash against Ant and Alibaba.

“If you are a rich man in Chinese culture and have very strong economic power and social influence, you are politically dangerous and you need to be very restrained for security reasons,” said Gary Liu, an independent economist in Shanghai.

People in China see Mr. Ma and Ant as the main beneficiaries of the authorities’ cautious approach to regulating internet financing. “Still, he complained,” said Mr. Liu. “This type of person is not respected in Chinese culture.”

Chris Buckley and Keith Bradsher contributed to the coverage.

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