“Racial or ethnic discrimination or profiling in any form violates Alibaba’s policies and values,” the company said in a statement on Thursday. “We are dismayed to learn that Alibaba Cloud developed a facial recognition technology in a testing environment that included ethnicity as an algorithm attribute for tagging video imagery.”

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“We do not and will not permit our technology to be used to target or identify specific ethnic groups,” the company added. Alibaba is the parent company of the South China Morning Post . The company declined to comment further for this story.

Also on Thursday, new rumours emerged from a Radio Free Asia report alleging the company was being investigated by China’s central government. Alibaba denied the allegation, saying it has benefited from government supervision, which it credits with helping the company’s “healthy development”.

The facial recognition controversy was kicked off by reports on Wednesday. According to web pages discovered by surveillance industry publication IPVM, and reported by The New York Times, Alibaba Cloud advertised software features on its official website that could help online platforms single out the faces of minorities as part of its “content security” service. The feature is a part of Alibaba’s Cloud Shield solution, which “detects and recognises text, pictures, videos, and voices containing pornography, politics, violent terrorism, advertisements and spam,” according to the materials published by IPVM.