Shares of Alibaba fell in both Hong Kong and extended-hours U.S. trading as reports surfaced that the Chinese government is conducting an anti-monopoly probe into the tech giant.
China’s State Administration for Market Regulation said through official online channels Thursday it has opened an investigation into Alibaba over monopolistic practices. The primary issue named was a practice that forces merchants to choose one of two platforms, rather than being able to work with both.
The news comes on the heels of an increasing — and largely unexpected — push by Chinese authorities to rein in their biggest tech firms through regulatory action.
Alibaba confirmed the market regulator’s investigation in a public statement, and said “business operations remain normal.”
Bloomberg first reported the news, which was announced by Chinese state news agency Xinhua.
Hong Kong-listed shares of Alibaba dropped more than 8% Thursday as of late-morning trading.
New York-traded shares of Alibaba fell more than 3% in after-hours trading on Wednesday.
Regulators to meet with Jack Ma’s other company
Also on Thursday, Chinese authorities said they would meet with Alibaba-affiliate Ant to supervise the financial technology company on issues such as operating in a market-oriented way and with consideration for consumers’ rights and interests.
The People’s Bank of China said on its website the other participating regulators are the China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, and State Administration of Foreign Exchange.
Ant confirmed in a public statement it received a notice Thursday from regulators for a meeting. Last month, regulators abruptly suspended the company’s massive initial public offering just days before the planned listing in Hong Kong and Shanghai.
