China denied on Friday it was planning to hit e-commerce giant Alibaba with a record fine of almost $1 billion for allegedly flouting monopoly rules, as authorities turned up the pressure on the country's vast technology sector.
Alibaba, China's largest online shopping portal, has been in the crosshairs of authorities in recent months over concerns of its reach into the daily finances of ordinary Chinese people.
The market's regulator denied it was planning to fine the company almost $1 billion for anti-competitive behaviour, as reported by the Wall Street Journal, who cited unnamed sources "familiar" with the matter.
However, on Friday it hit 12 other tech firms — including giants Tencent, Baidu and ByteDance — with symbolic fines for allegedly flouting monopoly rules.
Tencent was fined $77,000 for its 2018 investment in online education app Yuanfudao without seeking prior government approval for the deal, the State Administration for Market Regulation said in a statement Friday.
Search giant Baidu has to pay the same amount for acquiring consumer electronics maker Ainemo under the radar in 2014.
Beijing has warned it will take an increasingly ruthless approach to antitrust questions.
Premier Li Keqiang last week said the government would "strengthen anti-monopoly laws" and "prevent the disorderly expansion of capital".
Analysts said Friday's blizzard of fines send a strong signal of the Communist Party's dominion over the country's tech landscape.
"These penalties send a message: the economy and everything within it must comply with the state's directive," Alex Capri, a senior fellow at the National University of Singapore's business school, told AFP.
Capri said heavy-handed regulations will rein in the ability of tech firms to gobble up market share and influence with unchecked acquisitions.
– Alibaba's woes –
The ongoing squeeze on Alibaba – one of China's most influential companies – is the latest sign that the leadership is ready to deflate the ambitions of big tech firms in a runaway internet sector.
The Wall Street Journal reported Thursday that officials are considering levying a hefty penalty against the company that could top the $975 million paid by US chipmaker Qualcomm in 2015 — the biggest known fine for anticompetitive practices in China.
But the regulator in charge of the case told AFP there was no truth to the story.
"If it's not there (on our website), it's not (true)," a spokeswoman for the State Administration for Market Regulation said.
Still, the company's legal troubles linger. Problems began after comments in October by billionaire founder Jack Ma in which he laid into China's convoluted regulatory system.
In November, financial regulators pulled the plug on the record $35 billion Hong Kong-Shanghai initial public offering of Alibaba's online payment subsidiary Ant Group.
A month later, officials opened an investigation into Alibaba's business practices, deemed anti-competitive, and Ma disappeared from public view until mid-January.
The company, based in the eastern city of Hangzhou, last month said it was "fully cooperating" with the investigation by the State Administration for Market Regulation.
Regulators are also investigating whether the conglomerate should divest assets unrelated to its main online retail business, the Wall Street Journal reported, without offering details.
An Alibaba spokesperson declined to comment on the report when contacted by AFP.
The company has come under fire in the past for allegedly forbidding its merchants from listing on rival e-commerce platforms.
Once finalised, measures against Alibaba will need to be approved by China's top leadership.
Regulators have already told Ant Group to change its business model and hack back its lending, insurance and wealth management services.
Alibaba saw profits jump 52 percent to $12.2 billion over the last three months of 2020, despite the official crackdown.
CEO of China's Ant Group steps down
Beijing (AFP) March 12, 2021 –
The chief executive of Chinese fintech giant Ant Group has stepped down for "personal reasons", a spokesperson from the Alibaba-affiliated online payment provider said Friday, amid growing regulatory scrutiny.
Simon Hu has been replaced as CEO by Ant Group executive Eric Jing, according to the company's updated website, just months after Chinese authorities pulled the plug on the company's colossal Hong Kong IPO.
"The Ant Group Board of Directors has accepted Mr. Simon Hu's resignation request, due to personal reasons," a spokesperson said in a statement.
New CEO Jing also previously held the role from 2016 to 2019.
Tech tycoon Jack Ma's Alibaba, China's largest online shopping portal, has been in the crosshairs of authorities in recent months over concerns of its reach into the daily finances of ordinary Chinese people.
Its online payment subsidiary Ant Group made its name via its main product Alipay, the online payments platform and super-app that is now deeply embedded in China's economy.
But the company also expanded into offering loans, credit, investments and insurance to hundreds of millions of consumers and small businesses, spurring fear and jealousy in a wider banking system geared more towards supporting state policy and large corporations.
Ant Group had been set for a record-busting $34 billion IPO in Hong Kong and Shanghai late last year when the double listing was abruptly called off in November by regulators, who told the company it couldn't go ahead until it complied with new capital requirements.
The company's executives were later summoned to a meeting with China's central bank where they were ordered to "strictly rectify" Ant's financial services and return to its roots as a payment services provider.
– Fintech fears –
In recent months, Beijing has looked to rein in its booming financial technology companies to address a worrying debt mountain in the country, while also deflating the ambitions of high-flying business leaders thought to have stepped out of line with the Communist Party.
Chinese policymakers last week released a draft plan for development from 2021-2025 that said China would explore building a "correction and suspension mechanism" for innovative fintech products.
The crackdown on Ant Group, which has more than 700 million monthly active users, was an embarrassing comedown for Ma who was once vaunted as the poster child for Chinese entrepreneurship.
Regulators in December also launched an anti-monopoly investigation into Alibaba, part of a wave of recent anti-monopoly decisions including fines announced Friday against 12 other tech firms for allegedly flouting market regulations.
