China denied on Friday it was planning to hit e-commerce giant Alibaba with a record fine of almost $1 billion for allegedly flouting monopoly rules, as authorities turned up the pressure on the country’s vast technology sector.
Alibaba, China’s largest online shopping portal, has been in the crosshairs of authorities in recent months over concerns of its reach into the daily finances of ordinary Chinese people.
The market’s regulator denied it was planning to fine the company almost $1 billion for anti-competitive behaviour, as reported by the Wall Street Journal, who cited unnamed sources “familiar” with the matter.
However, on Friday it hit 12 other tech firms — including giants Tencent, Baidu and ByteDance — with symbolic fines for allegedly flouting monopoly rules.
Tencent was fined $77,000 for its 2018 investment in online education app Yuanfudao without seeking prior government approval for the deal, the State Administration for Market Regulation said in a statement Friday.
Search giant Baidu has to pay the same amount for acquiring consumer electronics maker Ainemo under the radar in 2014.
Beijing has warned it will take an increasingly ruthless approach to antitrust questions.
Premier Li Keqiang last week said the government would “strengthen anti-monopoly laws” and “prevent the disorderly expansion of capital”.
Analysts said Friday’s blizzard of fines send a strong signal of the Communist Party’s dominion over the country’s tech landscape.
“These penalties send a message: the economy and everything within it must comply with the state’s directive,” Alex Capri, a senior fellow at the National University of Singapore’s business school, told AFP.
Capri said heavy-handed regulations will rein in the ability of tech firms to gobble up market share and influence with unchecked acquisitions.
– Alibaba’s woes – The ongoing squeeze on Alibaba – one of China’s most influential companies – is the latest sign that the leadership is ready to deflate the ambitions of big tech firms in a runaway internet sector.
The Wall Street Journal reported Thursday that officials are considering levying a hefty penalty against the company that could top the $975 million paid by US chipmaker Qualcomm in 2015 — the biggest known fine for anticompetitive practices in China.
But the regulator in charge of the case told AFP there was no truth to the story.
“If it’s not there (on our website), it’s not (true),” a spokeswoman for the State Administration for Market Regulation said.
Still, the company’s legal troubles linger. Problems began after comments in October by billionaire founder Jack Ma in which he laid into China’s convoluted regulatory system.
In November, financial regulators pulled the plug on the record $35 billion Hong Kong-Shanghai initial public offering of Alibaba’s online payment subsidiary Ant Group.
A month later, officials opened an investigation into Alibaba’s business practices, deemed anti-competitive, and Ma disappeared from public view until mid-January.
The company, based in the eastern city of Hangzhou, last month said it was “fully cooperating” with the investigation by the State Administration for Market Regulation.
Regulators are also investigating whether the conglomerate should divest assets unrelated to its main online retail business, the Wall Street Journal reported, without offering details.
An Alibaba spokesperson declined to comment on the report when contacted by AFP.
The company has come under fire in the past for allegedly forbidding its merchants from listing on rival e-commerce platforms.
Once finalised, measures against Alibaba will need to be approved by China’s top leadership.
Regulators have already told Ant Group to change its business model and hack back its lending, insurance and wealth management services.
Alibaba saw profits jump 52 percent to $12.2 billion over the last three months of 2020, despite the official crackdown.
Shares in internet giant Alibaba soared more than eight percent Wednesday after billionaire founder Jack Ma made his first public appearance since November, ending weeks of speculation about his whereabouts after the company took a kicking from Chinese regulators.
Ma — one of Asia’s richest people with a fortune estimated at around $58 billion — disappeared from the public eye after he was hauled in front of regulators for an October speech critical of China’s financial system.
Shortly afterwards, the record-breaking $37 billion IPO of his financial group Ant was spiked at the last minute by mainland officials in a shock move that some saw as retaliation for Ma’s outspokenness.
China’s finance authorities have since ordered Ant to change its business model and hack back its lending, insurance and wealth management services, while Alibaba is also the subject of an anti-monopoly probe.
The disappearance of Ma from the public eye set tongues wagging on his whereabouts.
But a video clip released by Chinese financial news outlets Wednesday showed him in a recording giving a speech to rural teachers as part of an awards ceremony organised by his charity.
Shares in Alibaba soared 8.5 percent to HK$265.00 in Hong Kong.
In the speech, Ma praised China’s poverty alleviation efforts, a central target of the Communist leadership, and vowed to dedicate more efforts towards helping rural teachers.
“My colleagues and I… are even more determined to devote ourselves to education and public welfare,” he said, according to a transcript of his speech published by news site Tianmu News.
“China has… entered a new stage of development, and is moving towards common prosperity.”
A spokesperson for the Jack Ma Foundation, his charitable arm, confirmed he “participated in the online ceremony of the annual Rural Teacher Initiative event”.
Both Alibaba and Ant said they will cooperate with regulatory requests.
Ma, a charismatic former teacher turned internet entrepreneur, retired as chairman of Alibaba in 2019 but has long attracted attention for his outspokenness and flamboyant antics, performing as a rockstar at company conferences.
The continued squeeze on one of China’s most influential companies is the latest sign that the leadership is ready to deflate the ambitions of big tech firms in a runaway internet sector.
Beijing has a history of disappearing, investigating and imprisoning financial tycoons who do not toe the party line.
Last year, outspoken real estate tycoon Ren Zhiqiang was jailed for 18 years on alleged corruption charges, months after penning an essay critical of the Communist Party.
A COVID-19 survivor and comedian, Atunyota Akpobome, who is fondly called Ali Baba has taken a swipe at the Federal Government over the registration of the National Identity Number (NIN).
Ali Baba, who is also an actor, stated that the registration exercise came at the wrong time, considering the second wave of COVID-19 in the country.
He believes demanding NIN registration at this time is like supporting the notion that COVID-19 is not real and should not be taken seriously.
“The attitude of the government is also helping to fuel the stories that COVID-19 is not real because if COVID-19 is real, you won’t be talking about people going to do registration for NIN,” said the comedian who featured as a guest on Channels Television’s Sunrise Daily on Friday.
He added, “It is important that people are considered first; when you ask people to go register for NIN, it means that you are endangering the people, it is like inviting them to a beach to come and party.”
Ali Baba noted that Nigeria should have gone past the stage where people would stay in long queues for registration.
He said by asking people to go to the National Identity Management Commission (NIMC) offices, they stand the risk of getting infected with COVID-19.
According to the comedian, it is important for the government to wake up to its responsibility of protecting the people.
He stated, ”It is not now that you have a pandemic that you should insist on that kind of thing, let pandemic be over; whatever you are waiting for can be done later
“The number of people that are going to become victims of this COVID-19 from going to register will nearly be like people that went to the beach.”
“Government has not really been in the good books of believability for people; then to crown it all, in the face of this second wave you are tell people to do national identification registration and people are going and packing themselves in places,” Ali Baba added.
He also asked the government to ensure that the doctors risking their lives to curb the spread of the disease and treat infected patients were well taken care of.
Actress Elvina Ibru and veteran comedian Alibaba have shared their experience after testing positive for COVID-19.
They both shared separate videos of themselves in isolation and advised Nigerians to take COVID-19 precautions seriously.
Nigeria has recorded more than 90,000 cases of the COVID-19 disease.
On Monday, the country recorded its highest number of cases in one day – 1,204.
Elvina Ibru in her video which was posted on her Instagram handle said despite been extremely cautious and avoiding large gatherings she got infected with the virus.
“Corona is real. Yes, I have Corona. I, Elvina Baby Ibru, have Corona. I can’t hug my son, my sisters. I can’t hug them,” she said but added that she is recovering fast and that her immune system is strong.
She also shared videos of her medications and cautioned those shaming victims of the infection to desist from such.
Alibaba who spent his Christmas and New Year holidays in isolation also shared his experience on Instagram.
He called on everyone to take precautions, saying, “COVID is real. And my sympathy goes to those who have lost loved ones within the period that this COVID has come to Nigeria. Now please be aware that the next wave of COVID is deadlier, this strain of COVID is deadlier than the one that had come before because it’s mutating.”
While sharing the video on Instagram he said, “Don’t let anyone tell you it’s a scam. I just came out of isolation. Several people died while I was there. Some of my close friends knew and they were very supportive.”
Chinese tech giants including Alibaba and Tencent tumbled for a second day Wednesday after Beijing’s market regulator put out draft antitrust rules that signaled a looming crackdown on high-flying internet giants.
Rules published on Tuesday outlined plans to prevent “monopolistic behaviour” among internet companies, a shift from a previously more hands-off approach to antitrust issues.
The timing of the announcement also raised eyebrows, coming on the eve of China’s mammoth Singles’ Day, the world’s biggest shopping festival, which is propelled by Alibaba.
Shares in the e-commerce titan dropped 9.8 percent in Hong Kong — just a week after regulators halted an enormous IPO for the group’s financial arm — while tech rival Tencent slipped more than seven percent.
Meanwhile, online shopping platform JD.com plunged more than nine percent, smartphone maker Xiaomi dived more than eight percent and food delivery firm Meituan was 9.7 percent lower.
The losses followed massive drops for the firms on Tuesday.
Dave Wang, portfolio manager at Nuvest Capital told AFP the authorities’ move marks an “inflection point” for the sector.
“The dominance of the big players may have reached a point that is making authorities feel uncomfortable,” he said.
“They are looking to reduce this dominance or at least keep it in check.”
The guidelines, put out by the State Administration for Market Regulation, take specific aim at internet platforms and issues such as exclusivity clauses that hinder competition.
China’s antitrust watchdog is also targeting acts constituting an “abuse of dominant market positions” that could squeeze out smaller rivals — including unfair pricing, restricting transactions without justifiable reason, or pushing different prices and conditions on customers based on their buying habits.
The move to force business partners to “pick one of two”, therefore selling exclusively on one platform, is explicitly cited as a monopolistic practice as well.
China’s tech firms are known to have captive ecosystems. Alibaba’s Taobao platform, for example, supports payments via its own Alipay rather than Tencent’s WeChat Pay.
Beijing has moved to clip the wings of its fast-growing online platforms, most recently halting a planned record-smashing $34 billion IPO of Ant Group — Alibaba’s financial arm.
But Supun Walpola, equity analyst at LightStream Research, noted that even if the new rules affect companies’ current operations, it does not “drastically” hit their core business models.
“For instance, given its scale and penetration, I see no reason why Alibaba cannot be successful even without practices like data collaboration, price discrimination or exclusivity clauses,” he said
Formed in the Hangzhou flat of co-founder Jack Ma in 1999, Alibaba has ridden the seemingly insatiable Chinese appetite for online shopping to become one of the world’s most valuable companies.
On Friday, the US-listed company confirmed plans to add its value further, but listing additional shares in Hong Kong in an offering worth around $13 billion.
Here are the answers to key questions about the company:
– How did Alibaba start? –
Ma, a former English teacher who claims to have never written a line of computer code, had dabbled in various ventures with mixed success before friends introduced him to the internet while on a 1990s trip to the United States.
With Amazon already making waves in online shopping, Ma convinced a group of Chinese and foreign friends to front $60,000 in 1999 for a business-to-business e-commerce venture.
Ma dubbed it “Alibaba” because the name is easily pronounced in virtually any language, including Chinese, and because the “open sesame” catchphrase signified that its platforms “open a doorway to fortune for small businesses”, according to the company.
– Why has it been so successful? –
Alibaba was founded at a time when Chinese incomes were soaring after decades of rapid economic growth and the country was becoming increasingly digitalised.
That allowed Alibaba to easily facilitate commerce between consumers increasingly hooked on the ease of online shopping, and the country’s countless manufacturers of cheap goods.
Today, China has the world’s largest online population — in excess of 850 million — most of them smartphone users deeply immersed in the country’s growing digital ecosystem and e-commerce.
The business generated by Alibaba’s own mobile monthly active users — which reached 785 million in the most recent financial latest quarter — propelled rapid growth, and in September 2014, the company listed on Wall Street, raising $25 billion in what remains the largest IPO ever.
– What does it do? –
E-commerce remains the company’s bread and butter, conducted mainly via its largely consumer-to-consumer Taobao site and the more business-to-consumer Tmall, and typically paid for via its digital-payments unit Alipay, which has become a pioneer in that sector.
Through Alibaba’s platforms, Chinese consumers can buy a wide array of products from clothing to electronics, food, luxury products and even more unusual goods — including Boeing 747 cargo planes.
But Alibaba’s success has seen it invest heavily in new business lines as well.
It owns leading Chinese video streaming website Youku, and its Alibaba Pictures unit in 2016 bought a stake in Steven Spielberg’s Amblin Partners, which owns DreamWorks Pictures, among other entertainment ventures.
It also is investing in cloud computing and other aspects of China’s growing digital ecosystem including the acquisition of Chinese food-delivery leader Ele.me.
– How big is it? –
Alibaba is now the most valuable public Chinese company, with a market capitalisation of around $477 billion as of this week, and one of the top-10 most valuable in the world, though still trailing US e-commerce counterpart Amazon, which is worth around $870 billion.
Alibaba now claims nearly 104,000 employees at its headquarters in Ma’s hometown of Hangzhou in China’s eastern province of Zhejiang, but also around China and overseas.
The company has in recent years taken steps to go global, primarily in Southeast Asia where it runs the Lazada e-commerce platform.
China’s second richest man Jack Ma will contribute to a $145 million donation to the Chinese women’s football squad, it was announced Friday, who despite underfunding routinely outperform the men’s national team.
The one billion yuan ($145 million) donation from Ma – the founder of online shopping giant Alibaba – and two other charitable foundations will be spread over the coming decade.
It will contribute to “injury prevention and treatment, the career development of retired footballers, technical development and coach education, and youth development,” a joint statement said.
China made the Women’s World Cup – now underway in France – for the seventh time in eight editions, and boasts a record that the men’s team can only envy.
But the women’s side does more with far less support, and professional women’s football in China gets little notice and plays to meagre attendances.
The team put in a respectable showing in France, going out in the round of 16.
But they have slipped below the world’s best since reaching the 1999 final against the powerhouse Americans, where China lost on penalties, and insiders worry they will slide further without more backing.
Alipay, the charitable foundation of Alibaba, will fund “the bulk” of the initiative, Friday’s announcement said.
The rest comes from separate foundations established by Ma, and executive vice chairman Joseph Tsai.
The three parties aim to make soccer “more sustainable and accessible to girls and women across the nation”.
Cai Yong, an executive committee member of the Chinese Football Association, called the gift “unprecedented”, according to the statement.
Alibaba is a minority stakeholder in perennial power Guangzhou Evergrande of the men’s Chinese Super League.
Brooklyn Nets owner Mikhail Prokhorov on Thursday completed the sale of a 49% stake in the NBA franchise to one of the founders of Chinese e-commerce titan Alibaba, the NBA franchise announced in a statement.
The Nets said Russian billionaire Prokhorov would continue to be the controlling owner of the team, and there would be no changes in the day-to-day management of the franchise following the sale to Joseph Tsai.
No figures were revealed in the statement, but reports have valued the Nets at around $2.3 billion.
“It was important to us that we choose a partner who shares our commitment to the highest standards as we create a truly wonderful NBA franchise,” Prokhorov said.
“I welcome Joe to the organisation and I am looking forward to working with him for years to come.”
Tsai, who described himself as a lifelong sports fan, said he hoped to help expand the Nets brand across the globe.
“Basketball is a global sport and the NBA is one of the most recognized brands in the world,” said Tsai, a Taiwan-born Canadian citizen.
“I am excited about the NBA’s international growth prospects, and hope to play a part in bringing the NBA and the special character of the Brooklyn Nets to fans around the world,” he added.
Tsai co-founded Alibaba in 1999, and has an estimated net worth of around $9.7 billion according to Forbes.
The Nets said Thursday’s deal included an option for Tsai to purchase further shares of the team in 2021 which would give him a controlling interest in the team.
The share sale does not include the Nets home of the Barclays Center, which will continue to be wholly owned by Prokhorov’s Onexim Sports and Entertainment group.
Completion of the deal comes after the Nets finished the 2017-2018 regular season in 12th place in the Eastern Conference standings, outside the playoff berths with a record of 28-54.
Chinese e-commerce giant Alibaba has come under fire over its handling of user data in an episode that underscores growing concerns for privacy in the hyper-digitised country.
Alibaba affiliate Ant Financial was forced to apologise on Wednesday after users said they felt misled into allowing its Alipay service to share data on their spending habits with Ant’s credit-scoring arm and other third-party services.
Controlled by Alibaba co-founder Jack Ma, Ant Financial provides mobile payment, lending, and credit services to millions of Chinese consumers, and the controversy has featured prominently in China’s state-controlled media this week.
Consumers have come to expect a lack of privacy in a country where the government collects a file of personal data on each person including financial, education and other information, and where video surveillance is widespread.
But many Chinese internet users reacted with unusual outrage to learn that Alipay, which is used by millions daily to make mobile and online purchases on Alibaba’s Taobao platform and elsewhere, had automatically checked a box and hidden language showing they agreed to share their data.
“It’s just like Taobao profiting from selling our information, there’s no way to refuse!” one user of China’s Twitter-like Weibo service complained.
The sale of personal information is common in China, which last year implemented a controversial cybersecurity law that among other things requires services to store user data in China and receive approval from users before sharing their details.
“Because lots of information is already out there, everyone thinks there is no way to protect our personal information,” said Yue Shenshan, the lawyer whose online posts helped highlight the Ant Financial issue.
“But if we don’t focus on protecting our private information right now, the situation will only worsen.”
Ant Financial embedded the new policy in a page Alipay users see when they click through to see their 2017 spending activity.
Screenshots of the activity are frequently freely shared on social media by users who boast either about their purchasing power — or frugality.
“So angry” wrote one executive at a Beijing internet company who this week posted a screenshot of his 9.6 million yuan ($1.48 million) Alipay tab for the year. The data also revealed he ranked 301 on a list of the largest spenders in one district of Beijing.
Ant Financial said in a statement that it has since changed the opt-in policy and showed users how to change their settings.
“We are deeply sorry to everyone for the misunderstanding and panic this incident caused,” it said.
Privacy is a particularly high-profile issue now as the Chinese government is in the process of developing a national “social credit” scoring system that may rate people on everything from their credit-worthiness to their loyalty to the Communist Party.
Ant Financial’s credit-scoring unit Sesame Credit may someday feed data into that system.
The Alipay controversy arose just as regulators in Washington this week rejected Ant Financial’s proposed acquisition of US-based MoneyGram after concerns were raised over the security of American customers’ data.
A clash of the e-commerce titans in Southeast Asia, with Amazon launching its 2-hour express delivery service Prime Now in Singapore on Thursday, putting itself in direct competition with Chinese giant Alibaba for the very first time.
The move to the tiny, but wealthy, the city has been hotly anticipated.
Amazon has largely sidestepped China, but Singapore is seen as a gateway to Southeast Asia’s 600 million people who only do a fraction of their buying online.
Industry experts are bracing for a fierce battle as the two go head-to-head.
Alibaba already has a presence in the region, recently upping its stake in Lazada, an e-commerce firm with a foothold in six Southeast Asian countries.
Analysts expect Amazon to roll out services in major cities across the region in the next six months. But while it has the money and technical knowledge to challenge Alibaba, setting up shop won’t be easy.
As well as various regulatory hurdles, Amazon will have to find a way around logistical barriers, like the huge number of islands that make up the Philippines, or Jakarta’s paralyzing traffic. Not to mention poor internet connections across the region.
Nigeria cannot be successful in the fight against corruption until it democratises data and breaks the wall of secrecy that surrounds public finance.
This was one of the strong messages at ‘The Platform Abuja 2016’ held on Saturday.
It is a global media event that focuses on facilitating growth in Nigeria through personal capacities and productivity.
Poor Data Culture
According to the Co-founder of BudgIT, Seun Onigbinde, Nigeria’s poor data culture had made diversification of the economy an uphill task.
He stressed the need for a data revolution, pointing out that corruption would remain unless data were made available and accessible.
Resource persons at the event, one of whom was the Chief Executive Officer of Interswitch, Mitchell Elegbe, also harped on tapping overlooked resources to shift the nation’s economy away from reliance on crude oil revenue.
While some spoke on agriculture which they emphasised could be a perfect option to oil if well explored others stressed the need to explore digital technology that could give Nigerians the number of employment government was unable to provide in the time frame Nigerians required them.
Arts and entertainment is another sector that a Nigerian Comedian, Alibaba, said could bring billions of foreign exchange to Nigeria through tourism.
For over five hours, they brainstormed to encourage more than 3,000 youths present, to finally rise up to the task of empowering themselves while waiting for government to do their bit.
It is not the first time that the fall in oil price would be tagged an advantage for Nigeria’s economy but an agro-business expert, the National Coordinator, Nigeria Agribusiness Group, Emmanuel Ijewere, asserted that a crop like cassava could give Nigeria biofuel, ethanol and oil, but expressed dissatisfaction with the fact that it had remained untapped because the nation depended so much on crude oil sales.
The issues highlighted at the forum serve as a call to action to the youths of Nigeria to look around them, find niches to fill and build business that would create jobs for majority of Nigerians until government is set to play its part.