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Antitrust Probe Into Alibaba Rattles China’s Tech Community

E-commerce titan Alibaba’s antitrust woes are sending ripples of worry through the Chinese tech community.

Stock in Alibaba Group Holding Ltd. has been seeing a steady decline, along with shares of the country’s other giants, including competitor Tencent, food delivery company Meituan and JD.com, according to a report from Bloomberg. The corporations have collectively shed $200 billion in market capitalization since last Thursday, when it was reported that Chinese regulators were probing Alibaba for alleged monopolistic dealings.

The actions underscore China’s Communist Party’s growing desire to wrest control away from the country’s tech companies, which citizens rely upon for nearly every aspect of daily life, from ordering groceries and apparel to managing their money. Anxiety appears to be mounting among China’s regulators as these massive corporations and globally recognized services continue their unbridled growth, Bloomberg wrote.

Jack Ma’s online marketplace and his other businesses, like Ant Group Co., a payment solutions provider, have also faced increasing scrutiny in recent weeks. On Sunday, China’s central bank ordered the firm to cease its expansion into services like insurance and wealth management—an admonition that has spurred rumblings of a breakup of the company. In November, regulators squashed Ant Group’s $35 billion IPO, and announced more robust rules that empower them to take on companies’ anti-competitive behaviors.

Investment bank Baird’s analyst, Colin Sebastian, said the investigation into Alibaba “”will not likely result in significant changes to the company’s core business,” but new regulations could “open the door for competitors” to gain market share. Sebastian maintained an “outperform” rating on Alibaba’s stock, but lowered the price target from $325 to $285 due to the unpredictability of the pending investigation. Shares are currently trading around $238.

China’s antitrust law is currently under revisions to include the internet industry for the first time, and Alibaba’s fate remains in flux. Under current legislation, antitrust infringement can cost violators up to 10 percent of their revenue—a fee that would amount to as much as $7.8 billion for Alibaba.

On Monday, the company announced it was raising its stock buyback program from $6 billion to $10 billion, effective through the end of 2022.