Alibaba faces easier Chinese regulator settlement than Ant Group

Mar. 11, 2021 11:03 AM ETAlibaba Group Holding Limited (BABA)By: Brandy Betz, SA News Editor8 Comments
If Alibaba (BABA +2.7%) distances itself from former chairman and Ant Group leader Jack Ma, Chinese regulators will use a softer hand with the tech company, according to Wall Street Journal sources.
Regulators could hit Alibaba with an antitrust fine higher than the record $975M antitrust fine that Qualcomm had to pay in 2015. Alibaba had nearly $20B in net income last fiscal year, so a fine of that size wouldn't dent the company. And paying the fine would allow the company to move out from under the cloud of antitrust scrutiny.
Alibaba would also have to end its practice of punishing sellers who list on both Alibaba's platform and those of rivals like JD.com.
Regulators could force Alibaba to divest businesses not related to the core e-commerce operations.
Chinese regulators are more interested in cracking down hard on Jack Ma and fintech Ant Group, which is seen as disruptive to China's financial industry. Regulators pulled Ant's planned blockbuster dual IPO days before the launch after Ma publicly criticized regulators.
Alibaba owns a one-third non-controlling stake in Ant Group.
Alibaba shares are currently up 2.6%.
Last week, Ant Group executive chairman Eric Jing told employees that Ant still plans on becoming a public company.