Beijing officials told Alibaba Group to considerably reduce its expansive suite of media assets after reviewing the list and growing concerned about the tech firm’s influence over public opinion, The Wall Street Journal reported on Monday, March 15, citing sources.
Co-founded by Jack Ma a little more than 20 years ago, Alibaba is primarily an eCommerce firm but has branched out into other areas. Its portfolio of media assets includes print, broadcast, digital, social media, and advertising.
The Hangzhou-based company’s media assets include owning 100% of Hong Kong’s English-language news outlet, the South China Morning Post, and a 30% stake in Weibo, which is similar to Twitter. It also has a 37% piece of one of the country’s most powerful news agencies, Yicai Media Group, and has stakes in several other media-type companies.
Alibaba also has a big entertainment arm, which consists mostly of Alibaba Pictures Group and the country’s biggest streaming platform, Youku Tudou. So far, the company hasn’t been told to reduce assets there, the sources told the Journal.
When Chinese officials first saw the list of media assets owned by Alibaba, they were reportedly aghast at the size and scope of the portfolio, the sources told WSJ. Although they told the company to reduce the number, no specific media assets were named.
Having media influence and possible sway over public opinion is considered a direct challenge to the country’s Communist Party and its own propaganda vehicles, the sources said, per the news outlet.
Alibaba’s fourth-quarter earnings call in February was mostly positive, with revenue up 37% to US$38.9 billion. Active shoppers on its eCommerce platform hit 779 million by the end of 2020, up 22 million from 2019.
On the downside, the State Administration for Market Regulation (SAMR) launched a probe into possible competition law violations. Regulators are considering a fine above the US$975 million it hit Qualcomm with six years ago. Alibaba will also have to deal with accusations that the company penalizes merchants for selling on other eCommerce platforms in addition to its own.
