Chinese regulators launch an antitrust investigation against Alibaba
On Thursday, the State Administration for Market Regulation of China announced that it had begun an investigation against Jack Ma, the founder of the Alibaba e-commerce empire. The investigation started for alleged monopolistic behavior, such as urging sellers to choose a single sales platform between two competitors.
In the coming days, the People’s Bank of China, the Banking and Insurance Regulatory Commission, the Security Regulatory Commission, and the State Administration of Overseas Exchanges will hold talks with Ant Group, the parent company of Alibaba.
The talks seek to urge and guide the Ant Group to follow the market and law-based principles. Besides, according to the People’s Bank of China, they seek to implement financial supervision requirements.
This investigation is the latest in a series of setbacks for the world’s largest e-commerce company.
Last month, the company planned a $37 billion initial public offering. It is the world’s largest. However, it was suspended two days before its launch.
Jack Ma criticized the Chinese authorities at an event in Shanghai. He claimed that the regulatory system was weighing on innovation and it needed changing to increase it.
The following week, Beijing released draft antitrust and fair competition rules for online platforms. The government directly targeted them at titans’ e-finance and trading business like Alibaba.
The company earns 18.6% less in its first fiscal semester
Alibaba obtained a profit of 11.537 million dollars in its first fiscal semester. It is 18.6% less than in the same period of 2019, due to the lack of exceptional results that it did have last year.
Only in the second quarter, the company earned 4.347 million dollars. It is 60% less than in the same period last year.
Last year, Alibaba had extraordinary profits from its fintech subsidiary, Ant Group. Its IPO was to become the largest in history today.
Excluding the effect of that intake on the variation in profit, this would have yielded an increase of 43.8% in the second quarter. The overall growth in the semester would reach 35.9%.
Marked by the COVID-19 pandemic, in the first half of its fiscal year, Alibaba increased its turnover by 32% to $46.665 million.
At the end of September, the digital giant had added 64 million new consumers to its platforms compared to the same date in 2019. The number of monthly mobile users reached 881 million after adding 96 million in that period.
