China's regulators launched an anti-monopoly investigation into e-commerce giant Alibaba Group's dealings and businesses on Thursday and will summon Ant Group, an online finance platform spun off from Alibaba, in the coming days. The probe has been launched in a bid to tighten control over China''s fast-growing tech industries. Needless today, the crackdown comes as a major blow to Jack Ma's e-commerce and fintech empire, and may change the entire e-commerce ballgame in China in the coming days.

Once helmed as the symbols of the country's technological prowess, Alibaba and rivals like Tencent Holdings Ltd. face increasing pressure from regulators after amassing hundreds of millions of users and millions of dollars in revenues over the years. Following the announcement, shares of Alibaba plummeted more than 9 percent in Hong Kong on Thursday.

Major Blow to Alibaba

China's Alibaba secures $3 billion loan to finance acquisition spree
A logo of Alibaba Group is pictured at its headquarters in Hangzhou, Zhejiang province, China, October 14, 2015. Reuters

The State Administration for Market Regulation said that it has started an anti-monopoly investigation into Alibaba's dealings without sharing further details. Regulators including the country's central bank and banking watchdog will separately summon the tech giant's affiliate Ant Group to a meeting intended to drive home increasingly stringent financial regulations.

The regulators said that they were looking into Alibaba's policy of "choose one of two," which requires its business partners to avoid dealing with competitors. However, the one-sentence statement gave no details of possible penalties or a timeline to announce a result. Ant Group said in a statement on its official WeChat account that it will study and comply with all requirements that need to be met as part of the probe.

The probe definitely poses a massive threat to the growth of the world's biggest online financial services firm and comes as a major setback for the 56-year-old Ma, who pioneered Alibaba into one of the world's biggest e-commerce companies.

Alibaba's Shares Tumble

Alibaba
Alibaba Group founder and executive chairman Jack Ma. IANS

Following the announcement, Alibaba's shares fell 9 percent in Hong Kong on Thursday. The e-commerce giant lost as much as $60 billion in just three hours as investors panicked went for a selloff. Also, Shares in SoftBank Group Corp., Alibaba's largest shareholder, erased gains to trade as much as 2.7 percent lower in Tokyo on Thursday.

The probe follows China surprising suspension of Ant Group's planned $37 billion IPO last month, which was on track to become the world's largest. The orders for cancellation came just two days before shares were due to begin trading in Shanghai and Hong Kong.

However, for many the probe doesn't come as a surprise as Chinese leaders had earlier hinted that an economic priority in the coming year would be to step up anti-monopoly enforcement. That said, it isn't known the extent to which the country's anti-monopoly regulators will go after Alibaba and its rivals, this time around, as the country's leaders have said little about how harshly they plan to clamp down or why they suddenly decided to act now.