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The State Administration of Market Regulation has kicked off investigations into the Alibaba Group, laying claim that the company has been involved in monopolistic conduct such as 'forced exclusivity' by requiring e-commerce merchants to pick only one platform as their exclusive distribution channel, according to the South China Morning Post.
The paper says the investigation is being led by a former official from the state-owned China Communications Network Information Center (CCNIC), which oversees internet censorship and content management. The CCNIC was responsible for censoring the country's most popular social media platforms like Weibo and QQ after they were launched in 2009.
Alibaba has denied any wrongdoing and said it will fight the accusations. 'We are confident that we have not broken any laws,' an Alibaba spokesman told the newspaper. A spokesman for the government's Administration of Government Bureaus told the paper, 'If we find evidence, we will take strict action.'
Alibaba Group started out as a online Alibaba.com marketplace, and now encompasses several other services and companies. The company's affiliate Cainiao, which handles logistics, is reported to be one of the targets of the market regulation investigation.
Alibaba is China's biggest online retailer by total sales, and its Tmall platform — similar to Amazon's online marketplace — has also become a shopping destination for many in the country.
The company's founder, Jack Ma said in a speech in 2014 that if the government shut down Alibaba, more than 4,000 offline companies that depend on it would fail.
Tmall launched in 2013 and now has more than 500 brands and 30 million products, according to its website.
It is not the first time that the company has faced government scrutiny.
In 2012, Bloomberg reported that Alibaba was under investigation by the Cyberspace Administration for suspected financial fraud and a potential security threat in the wake of the September 11 attacks. The company denied those allegations, and the investigation was reportedly closed by the CACAB months later.
Alibaba was also reported to have faced a similar investigation by the State Administration for Industry and Commerce (SAIC), which is part of the State Council, over allegations that online food sales platforms like Eat天下 and Amazon Food were illegally selling hard to get medical drugs and other goods. The company said at the time that it would 'not bow down to external pressure and we will continue to operate as normal.'
In December, the company pulled its online food delivery service in Shenzhen for health and safety reasons.
Alibaba's future in the country has been called into question as well.
In early December, a media report said Jack Ma was looking to sell a 40 percent stake in the company.
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