The Chinese regulators are tightening their grip on Jack Ma’s empire by urging Alibaba Group to sell some of its media assets, including the South China Morning Post, in light of the rising concerns over the technology giant’s hold over public opinion in the country.
According to a person familiar with the matter, Beijing expressed doubts about Alibaba’s media holdings during several meetings dating to last year. Government officials are particularly upset about the company’s influence over social media in China and its role in an online scandal, involving one of its executives.
The co-founder of Alibaba, Jack Ma has been at the center of a government crackdown that began last year, targeting the eCommerce giant and its finance affiliate Ant Group and now reports are there that the Chinese government is asking Alibaba to shed media properties.
The media assets of Mr. Ma and Alibaba group was developed slowly over the years, spanning from BuzzFeed-style online outlets, newspapers, television-production companies, social media and advertising assets.
The eCommerce giant also holds a majority stake in Twitter-like Weibo and Youku, one of China’s biggest streaming services, as well as other online and print news outlets, including the South China Morning Post (SCMP), the leading English-language newspaper in Hong Kong.
According to the person, the discussion for a potential sale of the newspaper began last year, but no specific buyer has been identified yet, though it is expected to be a Chinese entity.
“Be assured that Alibaba’s commitment to SCMP remains unchanged and continues to support our mission and business goals,” Gary Liu, the newspaper company’s chief executive officer, told employees in an internal memo.
Concerns over Alibaba’s media holdings
Last month, media reports were there that Beijing had become alarmed about Alibaba’s media holdings after a scandal involving Jiang Fan, then the youngest partner at the eCommerce company. Posts about the scandal began disappearing from social media, including Weibo, increasing the fury of government officials.
China’s internet watchdog penalized the microblogging site for meddling with the spread of opinions. The scale and speed in which the website removed posts bothered government officials, who saw it as crossing a line, a person familiar with the matter said at the time.
Beijing is concerned that Alibaba could use its media assets as a tool to establish its power over forming public opinion and creating a vicious circle. Already, the company’s media has its hand in influencing the general public’s view about the emerging fintech sector, the person stated.
The widespread influence of Alibaba-backed media services is regarded as posing serious challenges to the Chinese Communist Party and its powerful propaganda apparatus.
Mr. Ma is honored in China as one of the country’s most successful entrepreneurs. But his fortunes have disappeared since he spoke out against China’s regulatory approach to the finance sector.
The criticism made by Mr. Ma ignited a list of unprecedented regulatory offensive, including a halt for Ant’s $35 billion initial public offerings and opening an antitrust probe into Alibaba. The media holdings could prove even more problematic.
It isn’t clear yet if Alibaba will need to sell all of its media assets. Any plan that the eCommerce giant comes up with will need approval from China’s senior leadership, according to reports.