China again fines tech companies for failing to report 43 old deals
We're not unfamiliar with tech market regulations, and without getting biased, China seems unprecedented at it. Throughout the year, China has been cracking down with rules on tech companies and large businesses such as Apple, Microsoft, LinkedIn, and even companies born on their home soil. Tencent games Alibaba, Didi, the online entertainment industry and others have been under strict regulations.
On Saturday, Baidu, JD.com, Alibaba was fined $78,000 each for failing to declare 43 old deals. Those deals can be dated as far as 2012 by the authority. According to sources, these native companies violated antimonopoly legislation. Under China's antimonopoly law created in 2008, it is the highest fine in similar cases.
For violating of 2008 antimonopoly legislation in 2012, JD.com, Alibaba and Baidu were fined $78,000 (500,000 yuan).
We took the liberty of searching through antimonopoly law, which is "China's first comprehensive competition law and codifies the existing body of competition-related laws and regulations."
It prohibits monopolistic conduct, abusive move from the dominant position, anti-competitive agreements and merging, promoting competition restrictions. These are some of the critical factors playing in the antimonopoly law made back in 2008.
While we could further dissect the rulebook, there is also enforcement and administration move behind the ruling. Along with private action, that correlates directly with the antimonopoly activities in terms of anti-competitive practice.
We've seen several other countries prioritising anti-completive practices as they can be harmful to the growing ecosystem. Once a company becomes too large, it can have a massive impact on more minor variations. It denies people the opportunity to become business owners, and the potentiality of having a new product on the market becomes a luxury. That's why larger companies need to come into the same boat that the government thinks is essential to respect the antimonopoly ruling. Otherwise, regulatory crackdowns are going to get more complex in the coming days.
It is tough to get excited about these actions from China anymore as it's a traditional form of news coming from them. We've seen a record number of regulation changes, violation agreements, antimonopoly practices, among many others.
Baidu and partners were involved in a recent agreement with Chine's automaker Zhejiang Geely Holdings, and the motive were to create a new-energy vehicle company.
Alibaba, on the other hand, adopted digital mapping and navigation firm AutoNavi in 2014. However, the purchase has a 44 per cent stake in food delivery service Ele.me, which boosted the food delivery services financial, starting antimonopoly practice in the sector according to the regulations.
Alibaba has an excellent grip on the State Administration of Market Supervision, giving them much control over competitors. However, acquisitions, buy-ins, and doing business have acquired this kind of power and control for years. Alibaba is one of the most famous names globally for eCommerce, and under their radar, such potentials are no surprise.
Antitrust reviews reported that Alibaba and Tencent backed China Literature in December last year, and Shenzhen Hive Box was fined 500,000 yuan for not reporting past deals. However, regulators agreed that these deals were not in harm's way of restricting or eliminating competition.
The country's regulation watchdog committee announced the violation back in 2012, and since then, the requirement stayed for the companies to present appropriate papers in front of the board. Failing to do so allocated for a fair warning and fine to the large tech companies. Though this kind of fine doubly dents their pocket, companies coming under regulations is something we see quite often from China.
State Administration of Market Regulation (SAMR) announced that they fined several companies in the same matter.