Online behemoths incur the wrath of anti-monopoly regulators
Authorities are cracking down on companies running afoul of anti-monopoly laws.
Internet companies are on high alert regarding the latest anti-monopoly requirements in the wake of the State Administration for Market Regulation (SAMR) leveling penalties for illegal acquisition deals involving Tencent and Alibaba.
Officials from Tencent-backed China Literature said the company is actively working with regulators on compliance issues, and Alibaba officials said it's also following guidance to carry out corrective measures.
SAMR authorities said yesterday it fined Alibaba 500,000 yuan (US$76,500) for increasing its stake in Intime Retail Group, which operates a chain of department stores, to 73.79 percent in 2017 without seeking approval.
China Literature, an online publisher and e-book corporation spun off by Tencent, was fined the same amount for failing to seek approval for its acquisition of entertainment and media production company New Classics Media in 2018.
Shenzhen Hive Box, a subsidiary of express firm SF Holdings, was fined for not declaring a takeover of a smaller competitor earlier this year.
“These companies have a large influence in the industry, carry out many investments and takeovers, have specialized legal teams and should be familiar with the regulations governing merges and acquisitions," a SAMR spokesperson said. "Their failure to actively declare has a relatively severe impact."
The administration is also investigating the merger between game livestream firms Huya and DouYu International announced in October.
“The Internet industry is not outside the oversight of anti-monopoly laws,” a SAMR official said.
“While the amount is immaterial to Alibaba, retroactive application of new anti-competitive rules announced in November may be a stern warning to toe the line in the future," a Bloomberg Intelligence analyst said. "Alibaba’s ability to strengthen its domestic e-commerce ecosystem through mergers and acquisitions may be significantly weakened due to rising anti-monopoly scrutiny."
