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Ironically, the new laws would have not hurt Alibaba as much today as it would have some years ago, Morgan Stanley noted. The Financial Times reported earlier this year that some merchants were told they would be pushed off Tmall if they used a rival platform - a local home appliance manufacturer even sued Alibaba over it. E-tailer Amazon is even under probe for similar patterns in the US and Europe. The internet giant has recently been under the scanner for anti-competitive practices like merchant exclusivity on its T-Mall platform, as per CNBC’s report. Overall, Morgan Stanley said that the new laws would impact five major internet companies.
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That being said, incumbent tech giants are likely to have hard times mainly due to pre-existing risks of competition, lower barriers to entry, and higher hurdles for industry consolidation from future mergers and acquisitions. The slew of new anti-monopoly laws is aimed at protecting fair competition in the market and safeguarding consumers’ interests. In a recent report, Morgan Stanley emphasized that the draft rules issued by China’s bureau for regulating monopolies - the State Administration for Market Regulation (SAMR) - to stop anti-competitive practices in the internet sector would adversely affect the major internet companies with dominant positions. But now, the situation is not getting any easier for the players. In recent years, China’s tech giants like Alibaba Group and Tencent have been losing market share to disruptors like TikTok-parent ByteDance and e-commerce giant Pinduoduo, due to lower barriers of entry. The new laws would impact five major internet companies including Alibaba, Tencent, Pinduoduo, JD.com, and Meituan.Morgan Stanley says China’s draft anti-monopoly rules will likely hit the country’s major internet companies, which were already fighting off rivals that were taking away chunks of their market share.