Alibaba shares fall 7% amid Chinese government pressures

Alibaba Group shares fell more than 7% Monday as the Chinese e-commerce kingpin felt the impact of the new pressures that Beijing is putting upon some of the country’s biggest tech companies.

Over the weekend, the Wall Street Journal reported that Alibaba affiliate Ant Group is in talks about sharing its customer data with the Chinese government as part of a new credit-scoring business. The Journal said that under the arrangement, Alipay would give up some control of its data on individuals, and such information would then be easily available to multiple Chinese state-run enterprises. According to the Journal, the new company could be up and running within a matter of months.

The Alibaba Group logo is seen during the company’s 11.11 Singles’ Day global shopping festival at its headquarters in Hangzhou, Zhejiang province on Nov 11, 2020.

Alibaba’s shares went into the red early Monday, and were down to around $191 as trading progressed.

The deal has implications for the privacy of more than 1 billion Chinese citizens who use Ant’s Alipay for financial services such as borrowing money, paying bills and making everyday purchases. The Alibaba situation is one of the latest to highlight the role the Chinese government plays in many of its country’s businesses operations.

Earlier this year, China’s State Administration Of Market Regulation levied a $2.75 billion fine on Alibaba for anti-monopoly violations.

On Saturday, China’s antitrust regulator told Tencent Music Holdings it had to give up its exclusive licensing rights for online music and had 30 days to abide by the ruling. Tencent shares gave up almost 5% Monday, and other notable Chinese e-commerce companies such as Baidu and saw their shares retreat by more than 5% during Monday’s market session.

Author: Rex Crum, Seeking Alpha

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