Beijing takes aim at Jack Ma's Alipay - report
Beijing is looking to break up Alipay, the payments app owned by outspoken Chinese billionaire Jack Ma’s Ant Group, according to reports.
Chinese regulators are understood to want to create an independent app for the loans business.
They have already ordered Ant to separate the back end of its two lending businesses, Huabei and Jiebei from the rest of its financial offerings. Huabei is similar to a credit card, while Jiebei makes small, unsecured loans.
But according to the Financial Times, Beijing wants the two businesses to be spilt into an independent app. Under the proposed deal, Ant would be required to turn over all the user data it uses to determine lending decisions to a credit scoring joint venture which would be partly state-owned.
An unnamed source, cited as being close to China’s regulators, told the FT: "The government believes big tech’s monopoly power comes from their control of data. It wants to end that."
The Guardian added that authorities are also concerned about the build-up of financial risk in China’s economy, with Alipay’s loans business helping to issue around 10% of all non-mortgage consumer loans last year.
Under the proposed deal, Ant will no longer assess the creditworthiness of potential borrowers. Instead, a future Alipay user would have their request automatically sent to the newly-formed credit scoring company, which holds their credit profile, before coming back to the Huabei and Jiebei app to receive their loan.
The report hit the Hong Kong-listed shares of Ma-founded Alibaba, which closed down 4%.