Shares of Alibaba ( BABA ) – Get Alibaba Group Holding Ltd. Sponsored ADR Report ended lower Monday following a report that Chinese regulators are planning to tighten their grip on Alipay, the company's popular payment app.
Beijing is looking to create a separate app for Alipay's highly profitable loan business, which is currently controlled by Alibaba founder Jack Ma's Ant Group, according to the Financial Times.
The plan will also see Ant Group turn over the user data that underpins its lending decision into a new credit scoring joint-venture that will will be partly state-owned, two sources familiar with the process told FT.
State-backed firms are set to take a "sizable stake" in the joint venture, Reuters previously reported, with a plan to establish a personal credit-scoring firm where Ant and Zhejiang Tourism Investment Group will each own 35% and other state-backed partners each owning 5%.
Alibaba ended down $2.69, or 1.6%, at $165.41 Monday.
Last week, Chinese regulators focused their aim on video game use by China's youth, continuing their c rackdown on excessive screen time .
The South China Morning Post reported that Beijing temporarily suspended approval for all new online video games in an effort to slow gaming addiction among young people. The move essentially means that "everything is on hold," a source told the SCMP.
Last month, China said that it was studying proposals for more regulations, including potential changes to how companies use data for advertising.
Beijing has been looking to rein in internet and technology companies that it feels have circumvented rules and regulations.
In July, China's antitrust regulator ordered Tencent Music Entertainment Group ( TME ) – Get Tencent Music Entertainment Group Sponsored ADR Class A Report to give up its exclusive music licensing rights and fined the company for anti-competitive behavior.
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