Alibaba and Disney partnership in China put on hold

China has frozen the partnership deal between e-commerce giant Alibaba and the Walt Disney Company, commonly known as Disney, in the country. The move comes amid tighter controls on online content being put in place by Chinese regulators.

Both the companies had entered into a partnership in December 2015, under which Alibaba had a multiyear licensing agreement for DisneyLife, a subscription service aimed at bringing Disney's films, cartoon series and games to Chinese screens. However, it is now reported that the service is down and that Alibaba is issuing refunds to its customers.

Both Alibaba and Disney have declined to comment. However, two people familiar with the matter told the Wall Street Journal that the service was taken down as per instructions from Chinese regulators.

Alibaba had started selling a Mickey Mouse-shaped connecting device through which the service could be availed of. It was priced at 799 yuan (£85, €109, $123) and required only an internet connection to stream the Disney content. The device was available on Alibaba's online shopping site Tmall.

One of the customers of the service claimed that he was informed in March by Tmall's customer-service staff that the service would be down for "an unknown period of time". He added that he has been credited with a refund which included the cost of the device and a one-year membership fee.

Another frustrated user said: "My kid likes the service and I would like to know if it would ever come back instead of just refunding without a proper explanation."

DisneyLife was started in China at around the same time it was launched in the UK. The service allows the company to offer and test its direct-to-consumer content offerings via the internet without the need for any intermediaries such as cable companies.

Robert Iger, chief executive at Disney, had said he was looking forward to a future when the so-called "bundle" of channels breaks down and people start subscribing to brands such as "Star Wars" directly. DisneyLife is expected to be introduced in other geographies if proven successful.