China’s top market regulator imposed a number of fines on domestic technology giants including Tencent, Alibaba’s subsidiaries and Bilibili on the first working day of 2022 for violations of anti-monopoly law, as the country further tightens regulations on the industry.
The State Administration for Market Regulation (SAMR) imposed nine fines on Tencent Holdings, 500,000 yuan in each case, for the company’s failure to report acquisitions of smaller companies or setup of joint ventures to the country’s anti-monopoly law enforcement agency, according to statements released on the website of the SAMR website.
For instance, the SAMR imposed a 500,000 yuan fine on Tencent for not reporting to the regulator 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.
A fine of 500,000 yuan is the maximum under China’s current anti-monopoly law introduced in 2008.
Similarly, Tencent was fined another 500,000 yuan for concealing its acquisition of a Beijing-based delivery company from anti-monopoly authority.
The regulator 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.
“Although last year’s mega fine on Alibaba will not likely be surpassed because of the company’s market scale, this year’s anti-monopoly cases are likely to exceed last year’s level, as the amended Anti-Monopoly Law is very likely to come into force in the first half of this year, and China’s national anti-monopoly bureau was inaugurated last year,” said Zhou Zhaofeng, a managing partner with law firm Fieldfisher China.
The crackdown on monopoly activities is aimed at boosting the high quality development of the digital economy, said Zhang Yi, CEO of the iiMedia Research Institute.
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.