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Chinese Regulators Call for Alibaba to Divest Media Interests, Report Says

By Rich Duprey - Updated Mar 15, 2021 at 10:22AM

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After Jack Ma rankled China's leaders with criticism, intense scrutiny of his tech conglomerate continues.

Alibaba (BABA -1.03%) continues to come under close scrutiny from Chinese regulators, who are concerned about the tech conglomerate's ability to shape public opinion through its vast media assets.

The Wall Street Journal reports Beijing is demanding Alibaba come up with a plan to significantly reduce its interests in those businesses, such as Sina's Weibo (a microblogging site like Twitter) and the English language South China Morning Post.

Alibaba co-founder Jack Ma

Alibaba's Jack Ma. Image source: Alibaba.

The concern follows a clash Alibaba had with antitrust regulators last year over the proposed IPO of its financial arm, Ant Financial, after CEO Jack Ma criticized regulators for stifling innovation. 

The backlash was so severe that Ant scrapped its IPO and Ma went into hiding. It also spurred Beijing to begin wider antitrust probes such as its investigation of the merger of HUYA and DouYu International Holdings, merger and fining Tencent spinoff China Literature for not reporting its acquisition of TV producer New Classics Media. 

Alibaba was also fined $76,500 for not seeking pre-approval of its increased ownership interest in department store chain Intime Retail Group, and regulators are ready to impose a fine of $975 million for anticompetitive practices at Alibaba's e-commerce platforms.

The Journal says that although Alibaba had no comment on the new divestiture report, it issued a statement saying: "The purpose of our investments in these companies is to provide technology support for their business upgrade and drive commercial synergies with our core commerce businesses. We do not intervene or get involved in the companies' day-to-day operations or editorial decisions."

Regulators also are reportedly looking at Alibaba's entertainment holdings, such as its YouTube-like platform Youku Tudou and its movie studio Alibaba Pictures Group, but are leaning against requiring any divestiture there.

 

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Stocks Mentioned

Alibaba Group Holding Limited Stock Quote
Alibaba Group Holding Limited
BABA
$86.79 (-1.03%) $0.90
SINA Corporation Stock Quote
SINA Corporation
SINA
Tencent Holdings Limited Stock Quote
Tencent Holdings Limited
TCEHY
$44.25 (-1.38%) $0.62
HUYA Stock Quote
HUYA
HUYA
$4.20 (1.21%) $0.05
DouYu International Holdings Limited Stock Quote
DouYu International Holdings Limited
DOYU
$1.36 (-6.21%) $0.09

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