China's market regulator has fined Alibaba, Tencent-backed China Literature, and Shenzhen Hive Box for failing to properly report past acquisitions for antitrust clearance. The regulator stated this action signals a tightening of antitrust enforcement within the internet industry, which is not exempt from such laws.
The fines follow new draft rules aimed at preventing monopolistic practices and protecting fair competition in the internet sector. While the fined deals were not found to restrict competition, the move underscores a broader regulatory shift.
The main topics covered are antitrust enforcement actions against major tech firms, new regulatory rules for the internet industry, and a specific review of a major merger in the game-streaming sector.
China’s market regulator flexes muscles, signalling Wild West era of unchecked Big Tech growth is over
- Latest move follows the issuance of new draft rules by the State Administration for Market Regulation (SAMR) in November
- Clampdown comes after China’s tech giants have taken the country from a technology backwater to one where digital innovation is leading the way
China’s market regulator flexed its muscles this week, slapping fines of 500,000 yuan (US$76,300) each on Alibaba Group Holding, Tencent Holdings-backed China Literature and Shenzhen Hive Box for not properly reporting past acquisitions for clearance.
“The internet industry is not outside of antitrust law,” SAMR said in a statement on Monday. “Although the fines are relatively small, the punishment signals to society that we are tightening up antitrust regulation in the internet space.”
The latest move follows the issuance of new draft rules by the State Administration for Market Regulation (SAMR) in November, aimed at stopping monopolistic practices, protecting fair market competition and safeguarding consumer interests in the internet space. The new rules from China’s bureau for regulating monopolies were open to public feedback until the end of last month, with the final version yet to be released.
The cases involve Alibaba’s past equity investments in major Chinese mall operator Intime, China Literature’s acquisition of film studio New Classics Media and SF Express-backed Shenzhen Hive Box’s acquisition of a smart locker rival in May. Although the companies failed to seek regulatory clearance, the deals were not deemed to be “excluding or restricting market competition,” so a fine, rather than break-up, was ordered, SAMR said.
Meanwhile, SAMR said it was also reviewing Huya’s US$6 billion deal to acquire game-streaming rival DouYu International Holdings, announced in October. Tencent owns more than a third of both DouYu and Huya and has majority voting power. The merger would further cement the tech giant’s leadership in esports and gaming.
Alibaba and Tencent did not immediately respond to requests for comment on this story.
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