China’s Alibaba faces gov’t pressure to divest media assets

The Watch

The Chinese government has begun a clampdown on streamers operated by ecommerce giants, with potential ramifications for services such as Alibaba-backed Bilibili.

The country’s market regulator, the State Administration of Market Regulation (SAMR), last year launched a probe into Alibaba and has fined companies such as Baidu and Tencent over anti-trust practices.

While probing Alibaba’s business, the Chinese government reportedly told the company to divest its media assets over its growing public influence.

According to the Wall Street Journal, authorities in Beijing have demanded that Alibaba drastically reduce its presence in the media sector. Officials in the country are reportedly worried that the company has too much influence over public opinion.

It is currently unclear whether Alibaba has been requested to completely withdraw from the media or to divest part of its shares.

Chinese media giants have become an increasingly frequent partner for Western companies. Sony invested $400m in Bilibili in April 2020, while BBC Studios more recently struck a far-reaching content pact with the streamer for existing shows such as The Watch, as well as new content.

Meanwhile, SAMR has also tightened scrutiny on platforms which sell goods directly to customers, though the regulator’s statement did not name the impacted companies such as Alibaba and ByteDance.

The regulator said that it had met with several streaming ecommerce companies over concerns about poor quality products and misleading advertising.

The companies presented self-disciplinary measures, but the regulator’s statement said that platforms must “quickly conduct self-control and comprehensive inspections” before more severe punishments are handed out.