Alibaba shares fell in early trading on Wednesday following news that the business had been suspended from a data-sharing agreement with the Chinese government.

Alibaba, according to A major newswire, failed to report a vulnerability in the Apache logging framework. As a result, the Ministry of Industry and Information Technology (MIIT) has put a six-month hold on cooperation with Alibaba's cloud unit, awaiting Alibaba's ability to resolve the issue internally.

Alibaba Group

Alibaba's cloud division accounted for 10% of revenue in the most recent quarter and expanded at a rate of 33% year over year, making it one of the company's top growth engines. The unit's loss comes at the end of a difficult year for Alibaba, which has seen its stock fall 50% this year and nearly 60% from 52-week highs. Shares have been pushed down by regulatory scrutiny, concerns about founder Jack Ma's health, and poor earnings.

This news could be hurting the industry as a whole; the KraneShares CSI China Internet ETF  is down about 2% today, while the NASDAQ Golden Dragon China is down over 1%.