China's State Administration for Market Regulation on Thursday launched an investigation into Alibaba Group for alleged monopoly demeanor, including an "exclusive dealing agreement."
Under such exclusive cooperation pacts, merchants cannot offer products on rival platforms.
Alibaba later made a statement on China's Twitter-like Sina Weibo: "Alibaba will actively cooperate with the regulators on the investigation. Company business operations remain normal."
Weighed in on by the news, Alibaba's shares took a pounding on Thursday, diving 8.13 percent in Hong Kong by close of trading.
Screenshot of an official statement from Alibaba's Weibo account following an investigation notice from the country's top market regulators, December 24, 2020. /Alibaba
China's market regulator said on Monday it will fine Alibaba Group, Tencent-backed China Literature and smart locker company Hive Box 500,000 yuan ($76,460) each for not reporting deals for anti-monopoly reviews.
China in November rolled out draft anti-monopoly rules concerning the country's online economy, including detailed information about disclosure requirements.
China's State Council then green-lighted the establishment of an inter-ministerial committee, aiming to enhance efforts to combat unfair competition.
The anti-monopoly law treats all market players equally and aims to create a business environment for fair competition, the regulator said.
It also warned that "the internet industry is not outside the oversight of anti-monopoly law and all companies ought to strictly abide by laws and regulations and maintain fair market competition."