Taiwan Tells Local Taobao Site To Re-register

Taiwan on Monday gave the domestic branch of Alibaba Group's e-commerce site Taobao six months to re-register as a Chinese investment rather than a foreign one, or leave, in the government's latest shot against mainland firms.

Amid growing political tension, Taiwan has stepped up oversight of Chinese investment and the operations of Chinese tech firms on the island. Last week it said it planned to stop local sales of Chinese internet television streaming services, though it does not plan to block them.

The investment commission of Taiwan's Economics Ministry said Taobao Taiwan was operated by a British-registered company called Claddagh Venture Investment, an investment firm that was in effect controlled by Alibaba.

The commission was also concerned about information security as user data was sent back to the mainland, it said, adding that Taobao Taiwan had been fined NT$410,000 and had six months to either withdraw its investment, or re-register.

"We do not consider the company as foreign investment," commission spokesman Su Chi-Yun said. "They will have to decide whether to disinvest or rectify their investment."

Taiwan treats investment from foreign countries differently than that from the mainland, with far more stringent rules.

Su said even if Taobao chose to register as Chinese investment in Taiwan, it could still fall afoul of rules barring Chinese companies from sectors vital to its business model, such as third-party payments or advertising.

Taobao Taiwan, launched last year, has previously said it was an entirely different platform from Taobao China.

Alibaba said it was "not in a position to comment". (Reuters)