The Chinese government has asked Alibaba Group Holding Ltd. to sell its media assets as officials are increasingly concerned about the technology giant’s growing influence over public opinion in the country, according to the Wall Street Journal.
Regulators have reviewed a list of Alibaba’s media assets and were shocked at how expansive the company’s interests have become and asked it to come up with a plan to substantially curtail the holdings, The Journal reported, citing people familiar with the discussions.
Jack Ma, Alibaba’s founder, has built up a sprawling portfolio of media assets over the years, spanning BuzzFeed-style online outlets, newspapers, television-production companies, social-media and advertising assets. Alibaba has a major stake in the Twitter-like Weibo, as well as other online and print news outlets, including the leading English-language newspaper in Hong Kong, The South China Morning Post.
The expansive influence is seen as posing serious challenges to the Chinese Communist Party and its powerful propaganda apparatus, the Journal said.
Representatives for Alibaba in China and the U.S. didn’t respond to requests for comment.
Ma is revered in China as one of the country’s most-successful entrepreneurs, for building up Alibaba and financial technology company Ant Group Co. into behemoths that have penetrated practically every corner of daily life, from shopping to food delivery to buying a home.
Ma’s fortunes have waned, however, since he rebuked Chinese efforts to strengthen financial oversight last year. Those comments set in motion an unprecedented regulatory offensive, including scuttling plans for Ant’s US$35 billion initial public offering and opening an antitrust probe into Alibaba. His media holdings could prove even more problematic. While concerns about Alibaba’s growing influence have been simmering for years, they took on new urgency following an incident last spring when several Weibo posts about a senior Alibaba executive’s alleged involvement in an extramarital affair were deleted.
China’s campaign to curb the influence of its technology moguls expanded last week with fines against Pony Ma’s conglomerate Tencent Holdings Ltd. Top financial regulators see Tencent as the next target for increased supervision after the clamp down on Ant, Bloomberg reported.
It isn’t clear whether Alibaba will need to sell all of its media assets, the Journal reported. Any plan that Alibaba comes up with will need approval from China’s senior leadership, according to the newspaper. Alibaba’s U.S.-traded shares were down 1.9 per cent as the market opened Monday in New York.
