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Bloomberg
China’s antitrust watchdog fined Alibaba Group Holding Ltd and a Tencent Holdings Ltd unit over a pair of years-old acquisitions and said it’s reviewing an impending Tencent-led merger, signalling Beijing’s intention to tighten oversight of internet sector deals.
The State Administration for Market Regulation said it’s reviewing the combination of DouYu International Holdings Ltd with Huya Inc, which could create a Chinese game streaming leader akin to Amazon’s Twitch. It fined Alibaba 500,000 yuan ($76,500) for failing to seek approval before increasing its stake in department store chain Intime Retail Group Co to 73.79% in 2017, while China Literature Ltd, the e-books business spun off by Tencent, was also censured over a previous deal, according to a statement.
The penalties come after regulators last month declared their intention to increase scrutiny of China’s largest tech corporations with new anti-monopoly rules. Beijing in November unveiled draft regulations that establish a framework for curbing anti-competitive behaviour such as colluding on sharing sensitive consumer data, alliances that squeeze out smaller rivals and subsidising services at below cost to eliminate competitors. Shares in Alibaba and Tencent extended losses and closed down more than 2.5%.
“Investment and takeovers are important means for development and growth of internet companies,†the regulator said in the statement.
“The above-mentioned companies have a large influence in the industry, carry out many investments and takeovers, have specialised legal teams and should be familiar with the regulations governing M&A.