China’s State Administration for Market Regulation (SAMR), the country’s top market regulator, imposed a number of fines on domestic online giants including Tencent, Alibaba’s subdidiaries and Bilibili on the first working day of 2022 for violations of anti-monopoly law, as China stepped up efforts to tighten regulations on domestic online platforms. Experts believe that this marks the start of a sustained antitrust campaign targeting China’s internet giants in 2022.
On Friday, the SAMR imposed nine fines on Tencent, equaling a combined penalty of 4.5 million yuan ($706,050). Most of the fines involve Tencent’s illegal operations in the acquisition of smaller companies, according to filings published on Tencent’s website.
For example, the SAMR imposed a 500,000 yuan fine on Tencent for not reporting to China’s anti-monopoly law enforcement agency about its acquisition of an online wine retailing company based in Guangxi Zhuang Autonomous Region. Tencent completed the acquisition in November 2020 along with another investment company.
Similarly, Tencent was fined another 500,000 yuan for concealing its acquisition of a Beijing-based delivery company from anti-monopoly regulators.
Regulators also imposed a 500,000 yuan fine on Chinese online video company Bilibili Inc for not reporting its acquisition of mobile picture editing software company Versa Inc to regulators. Bilibili signed a contract with Versa in early 2020 to hold a 14.71 percent stake in the firm.
Alibaba (China) Network Technology Co, a subsidiary of Alibaba Group, also received a fine of 500,000 yuan for not reporting its acquisition of Chinese supermarket company Xingli.
The SAMR’s fines came amid China’s new stricter regulations targeting domestic online platforms in addition to cracking down on monopolistic behavior. In April 2021, China issued a record penalty of 18.23 billion yuan to Alibaba after determining that the company had abused its market positions over the course of several years.
Online platform Meituan and Tencent also received fines of 3.4 billion yuan and 9 million yuan in total last year for breaching anti-monopoly regulations.
The crackdown on monopoly activities is aimed at boosting the high quality development of the digital economy, Zhang Yi, CEO of the iiMedia Research Institute, told the Global Times on Wednesday.
“If the industry is full of concentration activities and monopolized by certain internet giants there will be no room for innovation,” Zhang said.
Zhang predicted that the newly announced penalties mark only the beginning of an expected intensified antitrust campaign in 2022.
“It is expected that the antitrust investigations this year will focus on investments and acquisitions by the internet giants and penalty will be higher than the current level,” Zhang said.
Photo shows the nameplate of National Anti-monopoly Bureau, which is in the same building of the State Administration for Market Regulation in Beijing. Photo: CFP
