Caixin
Aug 08, 2014 04:55 PM

Alibaba Tells Media Watchdog about Tech Magazine's 'Organized Extortion'

(Beijing) – Alibaba Group says it has filed a complaint with a media regulator over a technology magazine it says maliciously damaged the company's reputation and tried to get it to pay to stop negative reports.

This is the second time in three weeks that Alibaba has publicly fought back against negative coverage during the firm's pre-initial public offering "quiet period," during which it is not supposed to talk about business that may affect share prices.

The Internet giant, which runs popular e-commerce websites, is preparing to list on the New York Stock Exchange later this year. Analysts surveyed by the Bloomberg news agency said the company may set the IPO value at US$ 154 billion, and the analysts say the post-listing valuation could be US$ 198 billion.

Alibaba public relations director Yan Qiao wrote on his microblog account on August 7 that the company reported the tech magazine IT Times and its affiliated website, IT Business News, to Chinese media authorities.

On July 18, Alibaba released a statement through its Sina Weibo account saying that "Alibaba Group, currently in its pre-IPO quiet period, is suffering from an organized extortion of public opinion." At the time, the only details the company gave were that "a weekly magazine" and that "some media personalities" asked Alibaba to pay US$ 300,000 to avoid further negative coverage.

Alibaba said it reported the incident to the police in the eastern city of Hangzhou, where the company is headquartered, and added that "when faced with baseless accusations and unscrupulous manipulation of public opinion, we will not sit patiently or give in!"

After the statement was released, media outlets identified the weekly magazine as IT Times Weekly and Ge Jia, a popular blogger, as one of the media personalities. Alibaba declined to confirm either of the names publicly, but when a Caixin reporter asked a source at Alibaba whether the magazine involved was IT Times, the response was "You know what I mean." The expression is often used in sensitive matters to imply that a suspicion is correct.

The August 7 statement explicitly named IT Times Weekly and IT Business News.

Yan's post on Sina Weibo, China's version of Twitter, said the magazine and the website had "engaged in a long-term campaign to damage the firm's reputation through negative coverage." Staff at the e-commerce company had received "inappropriate requests" from IT Times suggesting a "business relationship," a euphemism for bribery, the statement said.

Multiple sources confirmed that Alibaba has reported these activities to a media regulator. It is unclear which government body that was.

Yan said that since 2010 the IT Times has published more than 80 articles attacking Alibaba's reputation, for a total of over 230,000 words. IT Times reporters never sought to interview Alibaba.

Within hours of the post, IT Times released a statement rebutting the allegations.

The magazine said it had never authorized any person or organization to approach Alibaba concerning a business relationship, and said the allegations of inappropriate requests were "pure fiction."

"We will not be intimidated by any business organization using PR tactics to achieve its commercial purposes," the magazine said. "We recommend that people who want to know the truth read the original magazine articles."

The weibo post "distorted the facts and recklessly slandered" the magazine, it said. "To protect our legitimate rights and interests, we will file a lawsuit against Yan Qiao in the coming days. If the microblog post was authorized by Alibaba Group, then they will face legal accountability too."

Yan responded on his microblog, saying: "I am pleased to respond (to a lawsuit). I would gladly see the whole truth come out."

(Rewritten by James Bradbury)

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