The move, coming at the request of China’s central bank, could weaken investor interest in the upcoming initial public offering of Alipay parent company and Alibaba affiliate Ant Financial Services Group, the world’s most valuable technology startup.
The Chinese State Council’s antitrust committee has been compiling information for over a month on Alipay, as well as on WeChat Pay, which is owned by Tencent Holdings, Reuters reported, citing unnamed sources.
Alipay currently commands a 55% market share of third-party payments in China, while WeChat Pay makes up 40%, according to industry publication China Banking News. No other payment provider exceeds a 2% market share.
The People’s Bank of China believes that both firms have used their dominant market positions to undercut competition, according to Reuters. However, the antitrust committee has not yet decided whether to go ahead with the probe, and it is unclear when a decision will be reached, Reuters reported.
Sources cited by the news agency also said that Ant Financial and Tencent are lobbying the Chinese government in an attempt to prevent the probe.
Revelations of an antitrust investigation into Ant Financial could damage the firm’s plans for a dual listing in Shanghai and Hong Kong, making it the most valuable IPO anywhere in the world this year. Ant Financial, which boasts 1.2 billion customers worldwide, according to Chinese state media, is rumored to be valued at over $200 billion.
The State Council, Ant Financial and Tencent Holdings did not immediately reply to requests for comment.
Ant Financial and e-commerce giant Alibaba are both controlled by businessman Jack Ma, who is a member of the Chinese Communist Party. Alibaba enjoyed the largest IPO of all time when it went public on the New York Stock Exchange in 2014, selling $25 billion in shares.
China is not the only country with concerns about consolidation in the tech sector. In the United States, the Department of Justice opened an ongoing antitrust investigation into potentially anti-competitive business practices by large tech companies last June.
On Wednesday, U.S. Congress members grilled CEOs Jeff Bezos of Amazon, Mark Zuckerberg of Facebook, Sundar Pichai of Google and Tim Cook of Apple over concerns about their market dominance.