China fines Alibaba for “monopolistic behavior”

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Three of China's largest technology companies have been fined by China's antitrust regulator for failing to disclose the acquisitions of smaller competitors, stepping up its enforcement against monopolistic corporate behavior to protect consumer interests.

The three companies are Alibaba Group Holding Ltd. (NASDAQ: BABA), Tencent Holdings Ltd. (HKG: 0700) and S.F. Holding Co. Ltd. (SHE: 002352). They each received a fine of 500.000 yuan ($ 76.457) for violating China's antitrust law.

"The online economy has become increasingly concentrated by market share, with resources fast concentrating on leading platforms", the regulator's anti-monopoly bureau was quoted as saying. "Complaints about platform monopoly have been increasing day by day, indicating competition risks and problems in the online economy".

In recent years, Alibaba has been expanding into offline retail, mainly through huge acquisitions. Tencent has also invested in a similar way in other outside partners, creating the advantage of expanding its territory.

The fines come after regulators made public last month their intention to increase scrutiny over China's largest technology companies by creating new antitrust rules. In November, Beijing unveiled draft regulations that create a framework to combat anti-competitive behavior, such as colluding on sharing sensitive consumer data, alliances that squeeze out smaller rivals and subsidizing services at below cost to eliminate competitors.

The regulator said in the statement that “Investment and takeovers are important means for development and growth of internet companies”.

“The above-mentioned 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 M&A. Their failure to actively declare has a relatively severe impact”.

Scott Yu, an antitrust lawyer with Beijing-based Zhong Lun Law Firm, believes that despite the relatively modest amount, the announced penalty has a "symbolic importance."

He added that "The announcement, together with the draft antitrust guidance unveiled in November, signals that Beijing will pay close attention to the monopolistic status of Chinese internet companies."

On Monday, Alibaba shares extended losses and closed at $256,03, down 3,20%.


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source: https://alinbugeac.com/china-fines-al...