The Chinese government has announced a new series of sanctions against its own technology giants. E-commerce players Alibaba and Tencent are hit the hardest.
The two – and other technology companies – are alleged to have not followed the anti-monopoly rules on disclosing transactions and will therefore be handed new fines from the Chinese competition watchdog. That has released a list of 28 transactions – mostly takeovers of smaller companies – that violated the rules.
Five of these transactions were carried out by Alibaba, which is fined a total of 2.5 million yuan (about 370,000 euros). The competition authority found that Alibaba had not properly disclosed a recent increase in its stake in video streaming platform Youku Tudou. Tencent, parent company of WeChat, even has to pay 6 million yuan (almost 900,000 euros) for a total of twelve takeovers.
The fines are much smaller than the record fine of 2.3 billion euros that Alibaba had to pay at the end of 2020 because of “anti-competitive behaviour”. Just before that, founder Jack Ma had antagonised the Chinese government by criticising the country’s strict regulations. The incident ushered in a period when the government began to interfere strongly with the powerful technology players in the country, whom it had once helped to make big.
Since then, the Alibaba empire has been chopped up, young people are only allowed to play games for three hours a week and tech rivals have to allow each other’s apps, to name but a few of the measures. With the new series of sanctions, Beijing is sending out a signal that it will not let its guard down and that the technology players must keep in step.