Minmetals Development Co Ltd, which operates an e-commerce subsidiary jointly with e-commerce giant Alibaba Group, is probed by top Chinese market regulator for “concentration of business undertakings” – a type of monopolistic conduct under Chinese law, according to a statement released by the listed company.
According to the statement, the contract with Alibaba to cooperate on the Minmetals E-Commerce Co in 2015 is suspected of concentration of business undertakings, and so the State Administration for Market Regulation (SAMR) is now investigating the company.
In May 2012, Minmetals Development launched an e-commerce business. In November 2015, Alibaba invested in the company and became the second-largest shareholder of the business as it held 44 percent of the company stake, the statement said.
In December 2019, Alibaba transferred the 44 percent stake to E-Commodities, a company that is principally engaged in the processing and trading of coal and related other products and providing logistics services throughout the commodity supply chain, according to the statement.
The statement said that the company will actively cooperate with the regulator in the investigation, and will fulfill its obligation of disclosure according to the rules of the Shanghai Stock Exchange.
According to government regulations, the definition of “concentration of business undertakings” involves activities banned by China’s anti-monopoly law, including “business operators acquiring the control rights from other businesses by acquiring equities or assets.”
This is the latest development in Chinese regulators’ move to crack down on monopoly activities. The SAMR has recently taken a series of actions to fight market monopoly practices, including a record-high fine on Alibaba and ordering platform businesses to check their monopolistic acts and rectify them.
Alibaba was fined 18.23 billion yuan ($2.78 billion) on April 10 for abusing its market dominance position and violating China’s anti-monopoly law, by forbidding merchants on its platforms to open online shops on competitors’ platforms, according to the SAMR.
China Minmetals Corp’s office building in Beijing Photo: IC
