Chinese tech stocks decline as Beijing reportedly seeks to break up Alipay in latest volley of regulation

• Alibaba and other Chinese tech companies fell Monday after the Financial Times reported Beijing wants to break up Alipay.
• Regulators want the Ant Group, which runs Alipay, to turn over consumer data used for lending decisions.
• Beijing wants the user data turned over to a new, partially state-run credit-scoring venture.

US-listed shares of Alibaba and other Chinese technology companies fell Monday after the Financial Times reported the Chinese government wants to break up Alipay, the financial services superapp from Ant Group, marking Beijing's latest move to overhaul the fintech heavyweight run by billionaire Jack Ma.

Regulators have already ordered Ant to separate Alipay from its two lending units, Huabei and Jiebei, into a new entity and bring in outside shareholders. Beijing now wants those lending businesses to have an independent app, according to the report published Monday. Ant would also have to turn over user data that informs their lending decisions to a new and separate credit scoring joint-venture that would be partly state-owned, according to two unnamed sources.

Shares of Alibaba fell by 2.7% on the New York Stock Exchange and tech and entertainment conglomerate Tencent fell 1.4%. Meituan, whose technology drives retail shopping including food delivery and travel services, lost 1% and online retailer JD.com declined 2.1%. Hong Kong-listed shares of the companies also dropped during Asian trading hours.

The Chinese government believes big tech's monopoly power comes from controlling data, a source close to financial regulators told the FT. "It wants to end that."

Beijing's move may slow down Ant's lending business which partially drove overall growth for Ant which until late last year was on its way to launching an IPO in Shanghai and Hong Kong. The Alipay app has more than 1 billion users and provides access to a range of services including transaction payments and taxi hailing.

The central bank this summer told loan industry officials that lending decisions must be made based on data from an approved credit scoring company rather than proprietary data, a source told the FT.