A Chinese online service that sells the best business and personal services to customers in the U.S. and abroad is facing a big hit after it was accused of ripping off millions of consumers in China.
The Shanghai-based Alibaba Group Holding Co., which also runs the Chinese e-commerce giant Alibaba Group, is under investigation by U.N. regulators for allegedly defrauding consumers in a massive online marketing scheme.
The U.K.-based U.G.
E Group Inc. said in a statement that Alibaba is “in violation of the anti-fraud rules” in China, where its businesses are subject to a strict government crackdown.
The Chinese company also faces a separate U.A.E. investigation for allegedly using false advertising, which can result in up to five years in prison.
Alibaba did not immediately respond to requests for comment.
Alibaba’s U.U.G.-backed platform, known as Xiaomi, is one of the world’s largest sellers of digital services and accessories, including home appliances and smart home devices.
The company said in the statement that its platform will continue to be free of all unauthorized use and content, and the company is cooperating with regulators.
U.B.C.-led anti-trust regulators in the United Kingdom have accused Alibaba of ripping customers off by charging excessive prices and using misleading marketing.
K. antitrust officials also have accused the Chinese company of unfairly using its position as the world leader in mobile payments and in-store delivery to boost its own revenues.
In May, U.C. Berkeley researchers found that the platform used by UB’s Beijing office to sell products in the country has a huge price advantage over competitors.
In addition to Xiaomis home appliance and smart-home products, the platform also sells a range of other products, including cars, clothes, home appliances, toys, household goods and other household items, as well as some consumer goods.
Xiaoms marketplace in China is home to many thousands of U.s. businesses, from furniture to cars, as it tries to reach the Chinese market.
The platform, which has more than 500 million users worldwide, was created in the 1990s by Alibaba founder Jack Ma.
The website was shut down earlier this year after U. British authorities said it was used by Chinese authorities to conduct “illegal, coercive and coercive” searches and seize personal information, including names, addresses, birth dates, phone numbers, credit card numbers, email addresses, social security numbers, and financial information.
Alibaba, which is a division of China’s Alibaba Group Holdings Corp., has not yet responded to requests from The Associated Press for comment on the UB investigation.