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(Bloomberg) – The Chinese government wants Alibaba Group Holding Ltd. is selling some of its media assets, including the South China Morning Post, amid growing concerns about the tech giant’s influence on public opinion in the country, according to a familiar person. with matter.
Beijing has expressed doubts about Alibaba’s media holdings in several meetings dating back to last year, the person said, asking not to be identified as the talks are private. Government officials are particularly unhappy with the company’s influence on social media in China and its role in an online scandal involving one of its executives.
Jack Ma, co-founder of Alibaba, has been at the center of a government crackdown that began last year, targeting e-commerce giant and its financial affiliate Ant Group Co. The Wall Street Journal reported earlier that the government Chinese asked Alibaba to get rid of media properties.
Ma and Alibaba have quietly built up a large portfolio of media assets over the years, spanning BuzzFeed-type online outlets, newspapers, TV production companies, social media, and advertising assets. Alibaba has a major stake in Weibo, similar to Twitter, as well as other online and print media, including SCMP, the main English-language newspaper in Hong Kong.
The discussion about selling the newspaper started last year, the person said. Although no specific buyer has been identified, it should be a Chinese entity.
Bloomberg News reported in February that Beijing had become alarmed over Alibaba’s media holdings after a scandal involving Jiang Fan, then the e-commerce company’s youngest partner. Articles about the scandal began to disappear from social media, including Weibo, drawing anger from government officials.
The Chinese internet watchdog sanctioned the microblogging site for interfering with the dissemination of opinions. The extent and speed with which the website removed the posts shocked government officials, who saw it as a line crossing, a person familiar with the matter said at the time.
“The country must pay attention to it and crack down on it, because the power of capital can be used by us, but also by the enemy,” wrote Chinese commentator Song Qinghui, who writes for publications including supported media. by the state.
Regulators were shocked at the scale of the company’s media interests after reviewing its holdings and asked it to come up with a plan to drastically reduce interest, the Journal reported, citing people familiar with the discussions.
Beijing is concerned that Alibaba may use its media resources as a tool to control public opinion, creating a “vicious cycle,” the person said. Already, the company’s media have played a role in influencing the general public’s opinion of the emerging fintech industry, the person said.
Weibo shares fell 2.4% in US trading, while Alibaba’s US shares were little changed.
The expansive influence is seen as posing serious challenges to the Chinese Communist Party and its powerful propaganda apparatus, the Journal said.
Alibaba representatives in China and the United States did not respond to requests for comment.
Ma is revered in China as one of the country’s most successful entrepreneurs. But his fortunes have weakened since he spoke out against China’s regulatory approach to the financial sector.
Learn more about Ma’s extensive media collections.
The comments sparked an unprecedented regulatory offensive, including scuttling plans for Ant’s initial $ 35 billion public offering and opening an antitrust investigation into Alibaba. His media assets could prove to be even more problematic.
China’s campaign to reduce the influence of its tech moguls spread last week with fines against Pony Ma conglomerate Tencent Holdings Ltd. Major financial regulators see Tencent as next target for surveillance increased after Ant’s crackdown, Bloomberg reported.
It is not clear whether Alibaba will have to sell all of its media assets, the Journal reported. Any plan made by Alibaba will require approval from senior Chinese management, the newspaper said.
(Updates with shares in 11th paragraph)
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