China fines Alibaba, Tencent-backed China Literature for not reporting deals to anti-trust regulators By Reuters

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© Reuters. FILE PHOTO: A logo of Alibaba Group is seen during a global shopping festival at a media center in Hangzhou

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SHANGHAI (Reuters) – China’s market regulator said on Monday it fined Alibaba (NYSE:) Group, Tencent Holdings-backed China Literature and Shenzhen Hive Box 500,000 yuan ($76,464.29) each for not reporting deals properly for anti-trust reviews.

The State Administration of Market Regulation (SAMR) said it had taken the decision after reviewing deals by the firms, including Alibaba’s deal with Intime Retail (Group) Co Ltd, China Literature’s acquisition of New Classics Media, and Shenzhen Hive Box’s acquisition of China Post Smart Logistics.

Hive Box’s backers include logistics giant S.F. Holding Co.

Hong Kong-listed shares of Tencent and Alibaba fell in afternoon trade after the news, with Alibaba last down 2.5% at a three-week low and Tencent down 2.8% at a two-week low. The broader market fell half a percent.

China has vowed to strengthen oversight of its big tech giants, citing concerns that they have over the years managed to build monopolies that curb competition and have amassed power to misuse consumer data and violate consumer rights.

Last month, Beijing issued draft rules aimed at preventing monopolistic behaviour by internet companies, which was seen as China’s first serious regulatory move against the sector.

The SAMR warned in a separate statement that “the Internet industry is not outside the oversight of anti-monopoly law”, and urged all companies to strictly abide by laws and regulations and maintain fair market competition.

“The fines of the three cases is a signal to society that anti-monopoly supervision in the Internet field will be strengthened,” the SAMR said.

Alibaba invested $692 million in Intime in 2014 and led a $2.6 billion bid in 2017 to privatise Intime, which operated 29 department stores and 17 shopping malls in China.

China Literature announced in August 2018 that it would acquire 100% of New Classics Media.

($1 = 6.5390 )

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Reuters – www.investing.com

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