Alibaba Photo:VCG

 Chinese e-commerce behemoth Alibaba Group on Tuesday night reported impressive earnings figures for the last quarter with a 37 percent surge in revenue thanks to a robust economic recovery in China. What was also clear from the widely-anticipated quarterly report was the great uncertainty facing the company from an antitrust probe and the suspension of its fintech affiliate Ant Group’s IPO.  

In the earnings report, Alibaba said that the anti-monopoly investigation launched by China’s State Administration for Market Regulation (SAMR) was still ongoing and the company was fully cooperating with the regulator. 

“We have established a special taskforce with leaders from our relevant business units to conduct internal reviews. We will continue to actively communicate with SAMR on compliance with regulatory requirements,” the company said in the report.

SAMR announced in late December that it had launched an investigation into the company for alleged monopolistic conduct, including requiring an exclusive dealing agreement, citing tips it has received.

Also in December, Chinese stock exchanges suspended what was expected to be the world’s biggest IPO for Alibaba’s fintech affiliate Ant Group. A month later, Alibaba said that there is still great uncertainty over not just the IPO but also the company’s businesses, as it was in the process of formulating a rectification plan that would need to go through regulatory procedures.

“Therefore, Ant Group’s business prospects and IPO plans are subject to substantial uncertainties. Currently, we are unable to make a complete and fair assessment of the impact that these changes and uncertainties will have on Alibaba Group,” Alibaba said in the earnings report. 

While the regulatory problems it has encountered apparently did not have significant impact on the company’s performance during the last quarter, it remains to be seen whether the results of the investigations would lead to serious repercussions for its business operations.

Overall, regulations are expected to tighten for the internet and online financial sector, as top Chinese officials repeatedly stated that strengthening enforcement of anti-monopoly laws and preventing the “disorderly” expansion of capital would be one of the top priorities for 2021 and the years ahead.

In a multi-year sweeping action plan to build a high-standard market system, the general offices of the Communist Party of China Central Committee and the State Council reiterated that China would strengthen and improve enforcement of antitrust and unfair competition laws.

Global Times