SAMR beefing up oversight on digital companies

Ding Yining
China's State Administration for Market Regulation imposed administrative penalties on several e-commerce and digital platform operators' merger and acquisition cases.
Ding Yining
SAMR beefing up oversight on digital companies
HelloRF

China's State Administration for Market Regulation (SAMR) imposed administrative penalties on several e-commerce and digital platform operators' merger and acquisition cases in a move to strengthen regulation in the sector. 

A total of 22 cases were under scrutiny by the market regulator involving Tencent, Alibaba and Suning, according to an official statement from the SAMR on Wednesday, sending a signal of more frequent regulatory measures to keep both listed and private Internet companies in check. 

They were ordered to pay a penalty of 500,000 yuan (US$76,923) for each offense.  

A string of penalties have been handed out by market regulators since last December, as it eyes to rein in the booming digital economy, sending a strong signal to tech giants that the Internet industry is not outside the oversight of anti-monopoly laws. 

Alibaba was fined for six cases involving its acquisition of minority stakes in smaller players, such as fresh food delivery service providers and dairy retailers.

Tencent was penalized for failing to meet regulatory requirements for its acquisitions of minority stakes in other mobile digital service and social network players including Sogou, Cheetah Mobile, Xiaohongshu and Wuba. 

Suning was also found to have breached rules for failing to properly notify regulators about setting up joint ventures with local commercial lender Bank of Nanjing and Mitsubishi Heavy Industries. 

Meituan's takeover of a digital membership management service provider was also flagged by the SAMR.    

Although these cases do not constitute monopolies and would not eliminate smaller players, the SAMR said they failed to file for proper approval. 

The anti-monopoly law stipulates that businesses have to file for acquisition applications from the State Council's anti-monopoly commission and should not go ahead with the deals. 

The SAMR has cautioned Internet companies to avoid unfair competition tactics and focus on technology innovation to offer products and services to achieve synergies with small and micro businesses for long-term stable and prosperous development. 

In March, the State Council unveiled a new set of anti-trust guidelines that target Internet platforms to ensure fair market competition and promote the innovative and healthy development of the sector, aiming to stop monopolistic behaviors in the platform economy and protect fair competition in the market. 

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