Big tech firms concerned over antitrust scrutiny in China
Apr 04, 2021
Washington DC [US], April 4 : Of late China's big tech firms like Alibaba, Tencent and Baidu are dealing with hurdles similar to those that faced by Amazon, Facebook and Google, which has now become a big theme and could hamper the growth of its homegrown tech giants.
The ongoing regulatory drive could affect the growth prospect of China's tech industry, should authorities decide to regulate with a heavy hand, The Frontier Post reported.
Alibaba found itself in the centre of the regulatory storm in December last year as China's market watchdog launched an investigation of the company and could face a fine of USD 1 billion or more as an antitrust probe into the company continues.
Besides Alibaba Group Holding, other big tech players have also faced the rage of China's antitrust regulators.
Tencent, the owner of the popular messaging app WeChat, recently paid a fine for failing to ask for approval on past acquisitions. Baidu, the largest search engine in China, paid the same fine. Other big firms like Didi Transport company also paid fines for not receiving approval to set up joint ventures.
Tech companies have felt rising tension since last year as regulators pushed forward a series of policies to regulate competition in the sector, according to Fortune Magazine report.
In November last year, China had unveiled draft regulations that would establish a framework for curbing anti-competitive behaviour such as colluding on sharing sensitive consumer data, alliances in a bid to eliminate competitors.
According to the Frontier Post report, the Chinese communist party does not want any one person or company to stand above it, however, it is cautious about how it conveys that message.
The report further concluded the fines imposed so far have been "slaps on the wrist." However, if the CCP continues to increase fines, or decides to block future ventures or massive IPOs, these tech firms could lose out on opportunities to grow, which would weigh heavily on their stock outlooks.
