Chinese regulators want billionaire Jack Ma to share consumer-credit data collected from his financial technology company Ant Group, which he’s largely resisted doing for years, The Wall Street Journal (WSJ) reports.
Regulators had long viewed Ma as a potential source of unfair competitive advantage over smaller lenders or even bigger banks through the Alipay app, which is used by over a billion people, WSJ writes. Alipay is in possession of a good amount of data on users’ spending, borrowing and bill and loan payment habits and histories.
Utilizing that massive amount of information, Ma’s Ant Group has made loans to half a billion people, and has worked with 100 commercial banks on supplying most of that funding, WSJ writes. Those arrangements have seen the banks taking most of the risks of borrowers defaulting, with Ant taking the profits as a middleman.
Authorities want to overturn that model, due to what it says is potential for danger to the country’s financial system. They want to make Ant utilize more of its own funds and also break what they say is the company’s monopoly over data.
Ma has little room to bargain at this point after the drubbing his empire has taken in recent months. The much-heralded Ant Group IPO, proposed to go for $37 billion in both Shanghai and Hong Kong, was shot down by President Xi Jinping personally after Ma’s statements criticizing government regulations on big tech.
Then, in addition, Chinese regulators announced more crackdowns imminent for large tech companies, particularly singling out Ma’s companies, asking them to move more toward payments and be less focused on other adjacent areas of commerce.
Ma has been reportedly out of the public eye as of late as the regulatory storm came down, PYMNTS writes. Duncan Clark, chairman of Beijing-based tech consultancy BDA China, said Ma may have been told to lay low for now due to the “delicate” situation.