China launches anti-trust investigation into Alibaba

China on Thursday launched an anti-trust investigation into tech giant Alibaba Group, in the latest blow for Jack Ma’s e-commerce and fintech companies.

Beijing’s State Administration for Market Regulation (SAMR) said they are scheduled to summon Ant Group’s affiliate in the coming days.

According to Reuters, the probe is part of an accelerating crackdown on monopolistic behavior in China’s booming internet space. The investigation is also the latest setback for 56-year-old Ma who founded Alibaba and became China’s most famous entrepreneur.

Last month, China also suspended Ant’s planned $37 billion initial public offering, which had been on track to be the world’s largest, just two days before shares were due to begin in trading in Shanghai and Hong Kong.

The ruling Communist Party’s People Daily published a strongly worded editorial piece that said if “monopoly is tolerated, and companies are allowed to expand in a disorderly and barbarian manner, the industry won’t develop in a healthy, and sustainable way”.

After the investigation became public, Alibaba’s shares fell nearly 9 percent in Hong Kong on Thursday morning, their lowest since July.

Regulators have warned the tech giant against the so-called “choosing one from two” practice, which means that merchants are required to sign exclusive cooperation pacts and preventing them from offering products on rival platforms

According to a separate statement by the People’s Bank of China on Thursday, financial regulators will meet with Alibaba’s Ant Group fintech affiliate. No specific date has been revealed yet, but this casts another cloud over a potential revival of the share sale.

The statement said the meeting would “guide Ant Group to implement financial supervision, fair competition, and protect the legitimate rights and interests of consumers”.

Alibaba said it “will actively cooperate with the regulators on the investigation” and that its business operations remained normal.

In a statement, Ant confirmed that it had received a “meeting notice” from regulators and would “seriously study and strictly comply with all regulatory requirements”.

This is by far the most aggressive action by Beijing’s market regulator yet to tackle the growing influence of China’s tech companies.