Alibaba to face further regulations

Dubai, United Arab Emirates- [ AETOS Wire ] : Chinese State Administration for Market Regulation (SAMR) is tightening of antitrust regulations in the agenda for 2021. Beijing has become watchful to expansion and the excessive market power of large technology companies. SAMR director Zhang Gong pursues unfair competition and claims that whether it is an online or offline business, no one can abuse their monopoly position. Obviously, the Chinese government wants to have more control over the tech giants.

Alibaba was already fined $2.8 billion by SAMR this April for abusing its monopoly on the market since 2015. China continues in this effort and is issuing proposals for new rules, especially for big players. Is China afraid of their influence and their ability to influence not only economic, but also the political situation?

The latest document deals with draft regulations or measures for the online industry, which mainly prohibits unfair competition, illegal acquisition or use of data from other companies. Interestingly, it is China that wants to prevent the misuse of consumer information and the violation of their rights.

According to Golden Brokers analysis, Alibaba has been affected by many other problems recently. The most serious was the accusation of the employee being raped by her own boss. E-commerce is dealing with various problems and during August their shares fell by almost 5%, which means that they are the lowest since October 2019.

One of the proposed measures is also a ban on practices that are often used by e-traders. This is a practice that prevents sellers from offering their goods on competing platforms.

Founder of Alibaba, Jack Ma, seems not to be a favourite of the Chinese government. Punishment for the trespasses came also last year, when the IPO of Ant Group on the Hong Kong Stock Exchange was suspended. According to a member of the Chinese government's advisory committee, China has begun to move away from "inclusive and prudent regulation" that has allowed the technology giant to grow indefinitely, and wants to focus on consumer protection. Investors are closely watching developments in China and Hong Kong, and it is possible that many will begin to move their capital to a "safer" sector.