Antitrust Investigation Against Alibaba – Bluff or Just a Start?

  • Alibaba forced online-shop owners to choose only one platform provider.
  • Jack Ma finally appears after months of missing.
  • Tencent has similar monopolistic policies.

In late December 2020, China’s State Administration for Market Regulation announced that they have launched an antitrust investigation against Chinese tech giant Alibaba, whose “pick one” policy has received multiple complaints from its competitors over the years.

The “Pick one” policy dates back to 2013 when Alibaba forced online-shop owners to choose only one place to run their business: either they close their shops on Tmall and Taobao, Alibaba’s own platforms, or they exit all other platforms, especially JD, the second biggest platform at that time. Since 2017, JD has been suing Alibaba for its unreasonable policy.

State-run media reports on the investigation.

But until now, the case hasn’t even received a hearing because Alibaba’s law team keeps delaying it using legal tricks such as objecting to subject matter jurisdiction.

For this reason, on Zhihu, many posts suggest that the intention of this sudden investigation is not really what they have announced, but to release a signal. Jack Ma, founder of both Alibaba and Ant Group, seems to have forgot where his empire resides.

Alibaba headquarters.

With his high profile of hanging out with foreign politicians and business magnates, his controversial support for the notorious 996 working hour system and especially his shocking speech going against China’s banking regulations at the Shanghai Bund Summit right before the investigation…lots of internet users said they wouldn’t be surprised if someday Ma fell from heaven, which might be happening right now.

On January 20, after disappearing for months, the longest amount of time since he became famous years ago, Ma finally showed himself through a video call to give a speech at an award ceremony for rural teachers in China. The investigation and what has happened to Ma have set a clear example to other tech giants.

Ma appeared in a video call after months’ of missing.

Concerning the investigation itself, the Anti-Monopoly Law of the PRC and the relatively new E-commerce Law of the PRC are the main go-to current regulations. If the government is just using this investigation to show Chinese tech giants who is the real boss but with no intention of actual punishment, Alibaba might get away with no fines. However, if Beijing gets serious and follows all the regulations, Alibaba could face a fine of anywhere between 1% and 10% of its past annual sales amount, which would be the largest antitrust fine ever in China.

Analysts say this is just a beginning. It might be a matter of time before other tech giants like Tencent and Meituan undergo similar investigations. Wechat, one of Tencent’s online messengers, has blocked many external links from other companies including Alibaba and ByteDance. Also, in 2018, Tencent Music has been accused by competitors of employing a similar “pick one” policy in the online music market.

However, for now, it seems like these investigations are more political than judicial. If other tech giants behave themselves, that day may never come.

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Just another attempt to show a more real China.

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