The Chinese government is moving to control the power of some of China’s most influential Internet companies. The country’s top market regulator announced Monday that Alibaba and Chinese Literature, Tencent’s e-book spinoff, will be fined for failing to get approval for their past acquisition deals.
In these cases Chinese literature acquired Alibaba’s stake in major Chinese mall operator Intown and film literature New Classic Media. Each of the companies will be fined 500,000 yuan (, 000 76,000), the announcement said. A spokesman for the market regulator told a news conference that although the amount was insignificant compared to the size of the companies’ multi-billion dollar contracts, the fines were expected to alert other industry players.
Alibaba has been expanding as an offline retailer in recent years, partly through aggressive acquisitions. Tencent, which has built a digital entertainment empire, is also helping to expand its territory to external partners as well.
Companies have failed to obtain regulatory approval, although no agreement is considered “avoiding or restricting market competition.” Therefore, the market authority ordered the imposition of fines rather than separation under China’s anti-trust laws.
Chinese literature states that it strictly follows the regulatory order to work on compliance and permit requirements. Alibaba is not immediately available for comment.
The connection between the game streaming giants Hua and Duo, backed by Tencent, is under investigation by the anti-trust regulator.
Alibaba and China Literary Cases are the first to point out that China has fined companies that are structured as “variable interest companies” for market concentration violations. The VIE corporate structure is popular among Chinese Internet companies because they allow them to operate as domestic companies controlled by foreign companies, but this system is controversial because it allows companies to find regulatory loopholes.
He told a news conference at a market event that the anti-Chinese anti-trust law, which began seeking public opinion in January, was currently under amendment. The industry last month unveiled a set of draft rules that specifically target monopolistic behavior among Internet companies, although industry experts say the regulations are expected to be complex.
… Stop them when these picos clearly offer many benefits, and the geopolitical realities are all too complicated. Will sites be over-regulated in China? Yes. Will they break? Doesn’t it still seem like it’s going in that direction? / Result
– ரூய் மா 马 睿 (@ruima) November 16, 2020