China Fines Digital Platforms Over Unapproved Deals

Didi, Tencent, and Alibaba are among Chinese digital companies being fined by China’s official market regulator — the State Administration of Market Regulation (SAMR) — over merger and acquisition deals, Reuters reported on Wednesday, July 7.

The companies were fined 500,000 yuan (US$77,183) per incident for neglecting to get approval in 22 deals, which is in violation of China’s anti-monopoly laws. Eight Didi subsidiaries were caught up in the investigation. Other digital companies levied with fines included Beijing Sankuai Technology and Suning.com.

By way of example, one of Didi’s units was established as a joint venture company with China FAW Group Corporation. The 2018 transaction was completed before the transaction was cleared by antitrust authorities.

In a related issue, ride-hailing giant Didi saw share prices decline on its upcoming public offering on the New York Stock Exchange following the removal of its presence from app stores in China.

China is upping the oversight of companies that are seeking a public listing in the US and those that are already listed. New guidelines have been instituted that cover the flow of data and security cross-border, including additional “confidential information management.”

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