Tech giants Alibaba and Tencent have incurred penalties from China’s market regulator for breaches of the country’s anti-trust law.
The State Administration for Market Regulation (SAMR) announced on 14 December that it had issued three fines each worth 500,000 yuan for equity acquisitions that were not lawfully approved and led to excessive operator concentration.
These deals include:
- Alibaba’s acquisition of a 73.79% controlling equity stake in department store and shopping centre operator Yintai Retail (银泰商业) during the period from March 2014 to June 2017;
- The full acquisition of New Classics Media (新丽传媒) by Tencent subsidiary China Reading Limited’s (阅文集团) in October 2018. China Reading operates in the online literature sector, while New Classics Media is a producer of TV series, movies and web dramas, as well as a talent manager.
- The full acquisition of Zhongyou Zhidi (中邮智递) by SF Express-backed Fengchao Wangluo’s (丰巢网络) in May 2020. Both companies are providers of express delivery services.
“The ‘Anti-trust Law’ is applicable to all entities, and domestic and foreign invested enterprises, state-owned enterprises and private-enterprises, small and large enterprises and online and traditional enterprises are all treated equally,” said a senior SAMR official.
“The goal is to ensure that all market entities participate fairly in market competition, and to create a fair and competitive commercial environment.”
Despite issuing fines for anti-trust infractions, SAMR has not requested the reversal of these deals or the restoration of previous levels of operator concentration, as SAMR’s investigations found that the three cases did not lead to “exclusionary or competition restricting effects.”