Today China’s State Administration for Market Regulation (SAMR) issued a terse statement saying it is investigating e-commerce platform Alibaba for suspected monopolistic practices involving restricting partners to work with it exclusively. Simultaneously, an announcement was made by state-run news agency Xhinhua that Ant Group has been summoned for meetings with a bevy of regulators.
Ant was originally an offshoot of Alibaba and owns China’s biggest mobile payment app Alipay. Its massive IPO was recently shelved because of regulator concerns. The regulators that it has to meet with include the central bank, China Banking and Insurance Regulatory Commission (CBIRC), China Securities Regulatory Commission (CSRC), and State Administration of Foreign Exchange (SAFE).
In a statement, Ant said “We will carefully study and strictly abide by the requirements of the supervisory department, and complete the implementation of relevant work without compromise.”
The giant fintech has already made operational changes to comply with regulator concerns. Last week Alipay stopped taking fixed deposits from clients.
Today, there are further reports that Ant’s Huabei platform with more than 100 million users has reduced loan quotas for some younger users to 2000 or 3000 yuan. It’s essentially a buy now, pay later platform, which started by targeting e-commerce but has since expanded. The Securities Times reports that Ant Group said it adjusted the quota to promote more rational consumption habits. Credit accounts for 39% of Ant’s revenues.
Ant is not alone. WeBank, an affiliate of WeChat owner Tencent, has slashed the loans available through its WeiDai app from 30,000 yuan to 20,000 yuan.
Meanwhile, today competition regulator SAMR republished an antitrust article from the state People’s Daily that elaborates on the Alibaba probe. It pointed to moves in both the United States and Europe that aim to reign in internet giants’ monopolistic practices.
The article concludes, “This investigation does not mean that the country’s attitude towards the encouragement and support of the platform economy has changed. It is precisely for the purpose of better regulating and developing the platform economy, guiding and promoting its healthy development.”
As we’ve previously reported, the launch of China’s digital yuan is in part a response to the dominance of Alipay and WeChat Pay in mobile payments.
Both Ant and WeBank are major players in the Chinese blockchain sector and Ledger Insights will exclusively publish their blockchain 2021 predictions over the coming days.
