State media has also called for tighter oversight. On the other hand, even the emergence of the investigation was enough to harm the company. The meeting supposedly stressed the importance of avoiding monopolistic practices and "preventing the disorderly expansion of capital". Asia's largest corporation after Tencent has led losses among China's internet sector leaders since Ant's IPO got yanked, taking the overall toll to roughly $200 billion.
"Antitrust (probe) is a strong signal from the government to guide the development focus of those internet tycoons", said Vincent Wang, a Shanghai-based partner specialising in antitrust regulators at Global Law Office.
Alibaba said Thursday that it would cooperate with regulators but didn't comment specifically on the "er xuan yi" allegations.
In a short statement issued Thursday, China's State Administration for Market Regulation said that the probe is focusing on allegations that the company forces merchants on its website to sign exclusive cooperation agreements, preventing them from selling products on rival platforms.
Ant Group, the company's financial spin-off, was summoned for talks with top bank officials about fair market competition, as well as customer rights and interest protection. Last month, regulators abruptly suspended the company's massive initial public offering just days before the planned listing in Hong Kong and Shanghai.
CNN, the AP, and other media analysts speculated that the Chinese Communist Party (CCP) is anxious about the explosive growth of Internet commerce and wants to tighten its political grip on China's tech titans.
Now, with homegrown internet players like Alibaba and Tencent Holdings Ltd. among the country's largest and most influential companies, regulators are signaling that they are increasingly setting their sights on their business practices.
The stock fell 13% in its biggest one-day drop on record.
As reported by Reuters, the investigation is aimed towards analyzing anticompetitive behavior in China's internet space.
According to the Wall Street Journal, Ma's offer did not help to salvage the IPO since Beijing was angered by his criticism of the government's excessive regulations in the national financial industry, which he viewed as a major obstacle for the growth of new financial services and innovations.
Further, Ant Group has also stated that it would thoroughly study and strictly adhere with the requests of regulatory departments.
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