Beijing slaps fines on tutoring apps backed by Tencent, Alibaba


The two apps are the latest in a slew of Chinese firms from giants like Alibaba and Tencent to smaller outfits like online grocery provider Nice Tuan that have fallen afoul of the antitrust watchdog in recent months, as Beijing reins in its once-freewheeling Internet sector. — Bloomberg

China is expanding its far-reaching tech campaign into online education, issuing the maximum penalties to two of the country’s fastest-growing tutoring apps for violating competition and pricing laws.

The State Administration for Market Regulation imposed fines of 2.5mil yuan (RM1.59mil) each on Yuanfudao, backed by Tencent Holdings Ltd, and Zuoyebang, which has received funding from Alibaba Group Holding Ltd, according to a statement Monday. The firms were penalised for making misleading claims about their businesses from falsifying the qualifications of teaching staff to faking user reviews, the antitrust watchdog said.

Yuanfudao and Zuoyebang said they accepted the penalties and will rectify the relevant problems.

The explosive growth of private education providers during the pandemic has drawn increased scrutiny over the sector. Last month, Beijing’s market regulator fined four private education providers including GSX Techedu Inc as well as a TAL Education Group unit for pricing violations. China’s education ministry also issued a statement reiterating limits on after-school study programmes in order to ensure that students get enough sleep.

“The fines are closely related to the recent crackdown on after-school tutoring institutions, focusing on their illegal activities and potential for stirring anxiety in society,” said Ye Le, Shanghai-based analyst with China Securities. “The regulatory pressure will keep building for the rest of the year.”

Going forward, the SAMR will intensify its regulatory supervision of after-school educational groups and crack down on illegal activities, according to the statement. The two apps are the latest in a slew of Chinese firms from giants like Alibaba and Tencent to smaller outfits like online grocery provider Nice Tuan that have fallen afoul of the antitrust watchdog in recent months, as Beijing reins in its once-freewheeling Internet sector.

Both startups are said to be eyeing initial public offerings. Earlier this year, Yuanfudao was seeking at least US$1bil (RM4.10bil) in fresh funding ahead of a possible initial public offering in 2022, people with knowledge of the matter have said. Bloomberg News reported in March Zuoyebang, whose backers also include SoftBank Vision Fund, Goldman Sachs Group Inc and Sequoia Capital China, was set to recruit former Joyy Inc. chief financial officer Bing Jin to aid in its preparations for a potential listing. – Bloomberg

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
   

Next In Tech News

Nvidia to invest at least $100 million in UK supercomputer, CEO says
Republican congressional committee will start accepting cryptocurrency donations
Demands of copyright trolls must be reasonable, EU's top court rules
U.S. FCC votes to advance proposed ban on Huawei, ZTE equipment approvals
Facebook launches ads globally for Instagram Reels
Daimler speeds up shift to electric vehicles, Manager Magazin reports
Google's cloud taps AMD for new service as chip wars heat up
Siemens to raise growth and profitability targets - report
Technology helps disabled student play the harp with her eyes
JPMorgan buys investment platform Nutmeg in UK retail push

Stories You'll Enjoy


Vouchers