Companies linked to Alibaba, Tencent punished in rare China crackdown on monopolies
Beijing stepped up its anti-monopoly measures by launching a probe into a proposed merger of two game live-streaming companies, and fining subsidiaries of tech giants Alibaba and Tencent on Monday.
The actions, announced by the State Administration of Market Regulation, were among the few times that anti-monopoly laws have been applied to China’s internet-tech sector. The came days after the Politburo, the country’s top decision-making body, vowed to strengthen its anti-monopoly efforts.
Alibaba was fined for not reporting its increased stake in Intime, a retail chain. China Literature, which is backed by Tencent, was penalized for failing to report its 2018 acquisition of New Classics Media, a TV production house.
Hive Box Technology, a subsidiary of logistics giant SF Express, which runs smart lockers, was also fined under the anti-monopoly laws for not reporting its purchase of China Post Smart Logistics.
Each was fined 500,000 yuan (US$76,000). The fines were relatively insignificant compared to the value of the parent companies, but they sent a clear message to large corporations, particularly to those in the internet-tech sector, that Beijing is determined to tighten its grip over their expansion, observers said.
Meanwhile, regulators said the merger of DouYu and Huya, two live-streaming game platforms, would be investigated because it may breach anti-monopoly laws. Initiated by Tencent in October, the merger of the two companies, which are listed in the United States, has been valued at US$6 billion.
Shares of Tencent trading on the Hong Kong Stock Exchange fell by 2.9% to HK$571 (US$73.66) on Monday. Alibaba took a 2.6% dip and closed at HK$251.6. China Literature fell by over 4% and closed at HK$55.85.
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