The multinational technology giants Alibaba Group Holding and Tencent Holdings have been fined $76,500 each by Chinese regulators for failing to disclose past acquisitions under the anti-monopoly laws of the country.
Before raising its stake in the department store chain Intime Retail Group to 73.79 percent in 2017 Alibaba should have obtained approval from the State Administration for Market Regulation, according to a statement. China Literature Ltd., the e-books business spun off by Tencent, was also fined the same amount for its purchase of New Classics Media in 2018. The deals aren’t deemed anti-competitive, the regulator said.
The penalties come after regulators last month declared their intention to increase oversight of China’s largest tech corporations with new anti-monopoly rules.
China, in November, unveiled draft regulations that establish a framework for curbing anti-competitive behavior such as sharing sensitive consumer data, alliances that squeeze out smaller rivals and subsidizing services at below cost to eliminate competitors.
As part of efforts to build new business models that merge eCommerce with brick-and-mortar retailing, Alibaba led a $2.6 billion buyout of Intime. In 2018, China Literature agreed to purchase New Classics Media for as much as $15.5 billion to expand in filmed content.
China’s heightened scrutiny is spurring fears of a broader crackdown on the country’s largest firms. Recently, the shares of internet company Meituan plunged as much as 7.4 percent after a leading Chinese newspaper wrote an editorial slamming the industry’s preoccupation with growing traffic and volumes in areas such as grocery delivery, at the expense of real scientific innovation.