Embattled Internet firm cites ‘operational adjustments’.
China’s e-commerce giant, the Alibaba Group, on Tuesday announced it will close a popular music streaming platform, Xiami Music. The announcement comes amid continuing investigations into the group and questions surrounding the future of its founder, Jack Ma.
Xiami Music said it will stop the service “due to operational adjustments” from February 5, marking an end to Alibaba’s online music streaming platform. It was launched in 2008 and acquired by Alibaba five years later. It remains unclear if the closure of the platform will be followed by further restructuring of Alibaba’s businesses, which have expanded beyond e-commerce to financial services — which is currently under the scanner by regulators — and a range of other online businesses.
The troubles for Alibaba started recently on the eve of the initial public offering (IPO) of its Ant Group, its financial arm and behind Alipay, China’s biggest digital payments company. The IPO was expected to be a world record-breaking one and was likely to raise $35 billion. But it was suspended by regulators in early November. This followed a speech by Mr. Ma in Shanghai at a high-profile financial forum. The speech was thought to have angered regulators as Mr. Ma took aim at China’s financial system and labelled state-run banks, whose monopoly has been challenged by his group’s entry into online financial services, as “pawn shops”.
On December 24, the State Administration for Market Regulation said it had launched a probe into Alibaba’s “suspected monopolistic acts”, including “forcing merchants to choose one platform between two competitors”.
China’s state media said Mr. Ma was “summoned” for talks ahead of the IPO, and talks with regulators are ongoing. The People’s Bank of China, China’s central bank, said last month that it was, along with the banking and insurance regulator and the securities regulator, holding talks with the Ant Group that were aimed at “implementing financial regulatory requirements, holding onto fair competition and protecting consumers’ legitimate rights”.
Mr. Ma has cut back on public appearances since his high-profile attendance at the Shanghai forum and the ensuing controversy. So far, neither regulators nor the state media in China have accused Mr. Ma of personal wrongdoing, but he has been asked, according to Bloomberg, to stay in the country while investigations into the group continue.