China begins anti-trust probe into e-commerce giant Alibaba

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(141111) -- HANGZHOU, Nov. 11, 2014 (Xinhua) -- An employee walks pass the logo of Alibaba Group at the company's headquarters in Hangzhou, capital of east China's Zhejiang Province, on Nov. 11, a holiday of
(141111) -- HANGZHOU, Nov. 11, 2014 (Xinhua) -- An employee walks pass the logo of Alibaba Group at the company's headquarters in Hangzhou, capital of east China's Zhejiang Province, on Nov. 11, a holiday of "Singles Day" that has become China's busiest online shopping day. Sales at Tmall and Tabao have snowballed to 50 billion yuan by 21:12 Tuesday night. (Xinhua/Ju Huanzong)

In a significant development, China’s top market watchdog on Thursday started investigation into alleged anti-competition practices by ecommerce giant Alibaba, as Beijing tightened control of an expanding Internet.

In a brief note, the State Administration for Market Regulation said that it is investigating Alibaba over its “choosing one from two” policy.

As part of this policy, merchants are forced to sell exclusively on Alibaba e-commerce platforms and skip rivals like JD.com.

“The State Administration of Market Supervision, based on reports, filed investigations into Alibaba Group Holdings Co., Ltd. for suspected monopolistic conduct such as ‘choose one out of two,'” the statement read.

Alibaba Group said in a statement that they have received notification from the State Administration for Market Regulation.

“Alibaba will actively cooperate with the regulators on the investigation,” the company said, adding that its “business operations remain normal.”

Xinhua news agency said on Thursday that The People’s Bank of China, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission, and State Administration of Foreign Exchange will “interview Ant Group in the near future”.

The move is “to supervise and guide Ant Group to implement financial supervision and fair competition in accordance with the principles of marketisation and rule of law, and to protect the legitimate rights and interests of consumers, and regulate the operation and development of financial services”.

The Chinese regulators have recently removed several apps, including banning thousands gaming apps on Apple App Store, in a wide-ranging “clean-up” of online content related to illegal activity, including obscenity, pornography, prostitution, violence, fraud or gambling.

With China cracking down on apps especially related to video games, Apple has warned Chinese app developers that thousands of more video games will be removed from App Store.

According to a report in The Wall Street Journal citing a memo, thousands of video games face removal as Beijing tightens control of Internet.

Apple said in the memo that developers of premium games and those featuring in-app purchases “would have until the end of the year to provide proof of government license or the app would be removed”.

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