- The company’s clients include NCR/Digital Insight, Tangerine Bank, and Wells Fargo.
- This is following pressure from the Chinese government.
- Regulators want the company’s operations under the oversight of China’s central bank.
Alibaba’s Ant Group is looking to sell its EyeVerify a biometrics firm venture in 2021. Also referred to as Zoloz, EyeVerify uses ISO/IEC standard presentation attack detection (PAD) technology for identity verification. The EyeVerify software is presently used by US banks, and other financial institutions to verify user identity.
The company’s clients include NCR/Digital Insight, Tangerine Bank, and Wells Fargo. Ant Group is trying to dispose of some of its non-banking firms as it consolidates into a financial holding company.
This is following pressure from the Chinese government. Regulators want the company’s operations under the oversight of China’s central bank.
In November, Alibaba and its Ant Group subsidiary were found to have broken anti-competition rules. The discovery triggered further investigations. Due to the sheer size of its operations, regulators additionally want the company to divest some of its firms.
According to China’s central bank, the group’s multiplex financial portfolio allows it to undertake financial arbitrage. The practice contravenes the nation’s trade laws.
In November Chinese regulators cut short Ant Group’s planned $37 billion IPO as a result of this and anti-competition violations. It was set to launch in both Shanghai and Hong Kong and slated to be the world’s biggest offering.
Under current conditions, a sale of Ant Group’s peripheral firms such as EyeVerify reduces regulatory red-tape while allowing it to secure funds needed to pay for potential penalties.
To avoid an embargo, the Alibaba Group affiliate has already submitted a restructuring plan to Chinese authorities in accordance with laid out guidelines. The restructuring process is set to be finalized by mid-February.
Alibaba Selling EyeVerify to Reduce US Regulatory Exposure
By selling its US-based EyeVerify firm, Alibaba and its Ant Group subsidiary will be reducing their exposure to government restrictions.
While Chinese authorities clamp down on major tech firms, the US government is looking to extend market prohibitions for Chinese technology firms.
Earlier this year, reports emerged indicating that the Trump administration was looking to ban US investments in Chinese firms Alibaba and Tencent. While the two were eventually spared, 35 Chinese firms faced prohibitions.
The scare highlighted the risks of doing business in the US at the height of US –Sino trade tensions.
While the Trump administration was a bit harsh with its foreign investment policies, the Joe Biden administration is intent on being similarly austere.
On Tuesday, Governor Gina Raimondo, Joe Biden’s nominee for the Commerce Department affirmed the stance that the Joe Biden administration will be taking when dealing with Chinese companies. She said that she would use taxes and export restrictions to push back against Chinese firms. The following is an excerpt from her statement.
“China‘s actions have been anticompetitive, hurtful to American workers and businesses, coercive and … culpable for atrocious human rights abuses, so whether it‘s the ‘entity list’ or tariffs or countervailing duties, I intend to use all those tools to the fullest extent possible.”