Dec 24 (Reuters) – China launched an antitrust investigation into Alibaba Group and will summon the tech giant’s Ant Group affiliate to meet in coming days, in the latest blow for Jack Ma’s e-commerce and fintech empire.
Following are comments from investors and analysts:
LIU XU, BEIJING-BASED RESEARCHER AT NATIONAL STRATEGY INSTITUTE OF TSINGHUA UNIVERSITY
“The action has been simmering for a while, after the top leadership several times emphasised enforcement of the antitrust law. Finally there’s a solution for the so-called ‘choosing one from two’ practice, but I hope the problem will be thoroughly treated, instead of only targeting Alibaba.”
VINCENT WANG, SHANGHAI-BASED PARTNER SPECIALISING IN ANTITRUST REGULATIONS AT GLOBAL LAW OFFICE
“There are administrative and economic considerations that trigger the idea of antitrust review among the internet platform businesses.
“Economically, internet tycoons have made a lot of money from the livelihood of the public, but are seen as not having made adequate contribution to areas badly needed by the country at the moment. The issue is more pressing as the government is determined to shift its focus from soft technology to hard-core technologies such as chipmaking.
“Antitrust is a strong signal from the government to guide the development focus of those internet tycoons.”
FRED HU, HONG KONG-BASED CHAIRMAN OF PRIMAVERA CAPITAL GROUP:
“The global markets will be watching very closely to figure out two big questions: are such actions politically motivated or genuine impartial law enforcement? And are the regulators targeting the private sector only while leaving longstanding state monopolies intact?
“It would be a tragedy if the antitrust law should be seen as ‘targeting’ successful private tech companies only.
“Furthermore, determining ‘monopoly’ in the dynamic rapidly evolving tech sector is a difficult, delicate and complex task. There is a danger regulators might use old rulebooks, as shown by Western countries’ bad experience.
“There is also a risk that regulators might go too far and be too heavy-handed. While it is necessary to crack down on monopolies, it is even more vital for China to keep the flames of entrepreneurial spirits alive.”
MARK NATKIN, MANAGING DIRECTOR AT BEIJING-BASED MABRIDGE CONSULTING:
“The anticompetitive behaviours cited as the reason behind China’s investigation into Alibaba are hardly new, but in the past, to help foster the growth of domestic champions that could take on global heavyweights like Amazon and Google , China’s regulators largely turned a blind eye to some of these issues.
“But now, as frictions with the U.S. and other countries have escalated, China’s policy mavens have shifted their focus to growing the domestic market. This has made it necessary to create a more competitive environment at home.”
BINAY CHANDGOTHIA, HONG KONG-BASED PORTFOLIO AT PRINCIPAL GLOBAL INVESTORS:
“We have toned down our bullishness on China … (and) moved some dollars away from China into the rest of Asia. Our belief is that the model that China follows, of encouraging private entrepreneurship would remain.
“(But) I think the policymakers are beginning to look a little deeper in terms of what their goals are … some of the institutions are becoming very large systematically and you need to ensure that the risks are controlled. But of course the market was a little disappointed.” (Reporting by Kane Wu, Cheng Leng, Samuel Shen, Yingzhi Yang and Tom Westbrook; Writing by Anshuman Daga; Editing by Stephen Coates)