BEIJING (Bloomberg): Chinese regulators fined Alibaba Group and a Tencent Holdings unit 500,000 yuan (US$76,500) each over failing to declare past acquisitions under the country's anti-monopoly laws.
Alibaba should have sought approval from the State Administration for Market Regulation before increasing its stake in department store chain Intime Retail Group to 73.79 per cent in 2017, according to a statement Monday.
China Literature, 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.
Beijing in November unveiled draft regulations that establish a framework for curbing anti-competitive behaviour such as colluding on sharing sensitive consumer data, alliances that squeeze out smaller rivals and subsidising services at below cost to eliminate competitors.
Shares in Alibaba and Tencent extended losses and were down more than 2 per cent in the afternoon.
Alibaba had led a US$2.6 billion buyout of Intime as part of efforts to develop new business models that combine e-commerce with brick-and-mortar retailing.
China Literature agreed in 2018 to buy New Classics Media for as much as 15.5 billion yuan to expand in filmed content. Alibaba and Tencent representatives didn't immediately respond to requests for comment.
Beijing's heightened scrutiny is spurring fears of a broader crackdown on the country's largest firms.
On Monday, shares in No. 3 internet company Meituan plunged as much as 7.4 per cent after the People's Daily 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.
Already a subscriber? Log in
Get 20% OFF The Star Digital Access
Cancel anytime. Ad-free. Unlimited access with perks.
