On Tuesday, April 13, China ordered 34 internet corporations to rectify their anti-competitive practices within the next month, signaling that Beijing’s scrutiny of its most powerful firms hasn’t ended with the conclusion of a probe into Alibaba Group Holding.
According to Bloomberg, shares in Tencent Holdings and Meituan extended losses after the State Administration for Market Regulation issued a stern statement emphasizing it will continue to eradicate abuses of information and market dominance among other violations. Also summoned to an ad-hoc meeting with the watchdog on Tuesday were industry leaders including TikTok owner ByteDance search giant Baidu and JD.com.
Regulators warned internet companies to “heed Alibaba’s example,” reaffirming their intent to abolish forced exclusivity among other practices. The meeting — organized jointly with the cyberspace and tax regulators — came days after Beijing wrapped up a four-month probe into Alibaba by slapping a record US$2.8 billion fine on the e-commerce giant for abuse of market dominance.
The penalty was less severe than many feared and lifted a cloud of uncertainty hanging over founder Jack Ma’s internet empire. It also came after the Chinese central bank ordered an overhaul of his Ant Group fintech titan.
Alibaba’s shares have gained 7% since the start of the week, but its fellow Chinese internet giants have gyrated while investors digest the rapid-fire announcements and concerns grow that Beijing’s scrutiny will extend beyond Alibaba. On Tuesday, Tencent gave up early gains to finish down slightly while Meituan, video service Kuaishou Technology, and JD all slid more than 3% in Hong Kong.
“The base line of policies cannot be crossed, the red line of laws cannot be touched,” the market watchdog said in the statement on Tuesday.
