China fines Alibaba, Tencent unit for antitrust violations

China’s antitrust watchdog announced that it is fining tech titan Alibaba and China Literature, Tencent’s e-book spinoff, for failing to declare past acquisitions.

The State Administration for Market Regulation (SAMR) also said it’s reviewing an impending Tencent-led merger.

Jack Ma / Photo credit: Alibaba

According to the regulator, it will fine Alibaba 500,000 yuan (US$76,400) as the ecommerce giant didn’t seek approval before increasing its stake in department store chain Intime Retail to 73.79% in 2017.

China Literature will be fined the same amount because of reporting irregularities in its acquisition of film studio New Classics Media.

SAMR also said that it will launch a probe into a merger between Tencent-backed game livestreaming firms Huya and DouYu that was announced in October. Other deals will be investigated as well, based on information that some firms hold increasing operating power in certain sectors.

Separately, Shenzhen Hive Box, backed by Chinese courier firm SF Express, was also censured over its acquisition of China Post Smart Logistics.

The penalties come after the regulatory body drafted antitrust rules last month in an attempt to define and curb anticompetitive behavior in China’s tech sector for the first time.

“Investigating and dealing with concentrated cases of illegal implementation in accordance with the law has always been one of the important contents of strengthening anti-monopoly law enforcement and market supervision,” SAMR said in a statement.

The move also marks another setback for Alibaba after the Shanghai stock exchange suspended Ant Group’s highly anticipated initial public offering in November.