Alibaba meets state regulator to defuse dispute over 'illegal actions' in China

Alibaba founder Jack Ma has met with the head of a powerful Chinese regulator, days after authorities accused the e-commerce giant of allowing “illegal” actions on its multi-billion-dollar online shopping platform. The meeting Friday between Ma and State Administration for Industry and Commerce (SAIC) director Zhang Mao may signal a de-escalation of the dispute, which saw the regulator deliver an unprecedented public dressing-down of the prominent Chinese firm. “We have always been committed to combating fake products and have devoted our efforts to solving this difficult problem,” Ma said during the meeting, according to a statement posted on SAIC’s website late Friday. [caption id=“attachment_2073127” align=“alignleft” width=“380”]  Reuters[/caption] Ma pledged that Alibaba would “actively cooperate with the government” to address the issue, according to the statement, which added that both sides agreed to work together to “promote the healthy and orderly development” of e-commerce in China. The meeting came after the SAIC, which is charged with maintaining market order in China, said in an official report Wednesday that Alibaba’s platforms had hosted “long-standing” violations of online business laws and regulations. It took aim at Taobao, Alibaba’s consumer-to-consumer platform which is estimated to hold more than 90 percent of the Chinese market, and Tmall.com, believed to command over half the market in China for business-to-consumer transactions. A SAIC survey published last week on Taobao that found only about a third of products sampled to be genuine. “Alibaba has not paid enough attention to illegal operations on its online trading platforms or taken effective measures to tackle them… placing itself in the biggest credibility crisis since its establishment,” the SAIC said. The SAIC has become known for its crackdowns on foreign companies accused of violating China’s anti-monopoly law, but it is rare for the regulator to deliver harsh public criticism of a domestic firm. Alibaba hit back on Thursday, with vice chairman Joe Tsai dismissing the allegations as “unfair”. Meanwhile, the state-run Global Times newspaper reported Saturday that five US law firms were “investigating possible securities frauds” involving Alibaba in the wake of the SAIC allegations. Headquartered in the eastern city of Hangzhou, Alibaba completed the world’s biggest IPO with its $25 billion listing on the New York Stock Exchange in September, making Ma China’s richest man overnight. Ma, who started the company in 1999, last week told business and political elites gathered in Davos that he wants to take Alibaba beyond China and turn it into a global e-commerce platform serving two billion customers. Alibaba now counts 334 million active buyers. AFP