Taiwan gave e-commerce site Taobao Taiwan six months to re-register as Chinese-backed as opposed to foreign or leave the island, at the government’s most recent shot against Chinese platform businesses.
Taiwan has stepped up oversight of Chinese investments and the operations of Chinese technology firms on the island and last week said it planned to prevent local sales of Chinese online television streaming solutions, though it did not plan to block them.
Taiwan treats investment from overseas nations differently to that from China, with much more stringent rules for China-based businesses.
The investment commission of Taiwan’s Economics Ministry said on Monday Taobao Taiwan was operated by a British-registered entity named Claddagh Venture Investment, which it said was in effect controlled by China’s Alibaba Group Holding Ltd.
Alibaba possesses the wildly popular main Taobao platform in China.
The commission was also concerned about data security as user data was sent back to China, it said, adding that Taobao Taiwan had been fined T$410,000 (approximately $13,961) and had six months to withdraw its investment or re-register.
The company must have registered as a Chinese investment but came as overseas since “it’s more convenient”, he added.
Claddagh’s Taiwan office voiced regret in the move and said it had received no formal notification from the government, but said it respected the decision and would”carry out rectification as soon as possible”. It did not give details.
It said Taobao Taiwan, established this past year, is a totally different business from Taobao China and does not come under the Alibaba group.
Alibaba stated it was “not in a position to comment”.
Claddagh is registered in the British town of Altrincham, just outside of the northern powerhouse city of Manchester.
Su said even if Taobao chose to register as a Chinese investment in Taiwan, it could still fall foul of rules barring Chinese companies from sectors vital to its business model, such as third-party payments processing or advertising.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our content partners at Thomson Reuters. Reporting by Yimou Lee and Ben Blanchard. Additional reporting by Brenda Goh in Shanghai. Editing by Clarence Fernandez and David Holmes.
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