Xi Jinping recently chaired a meeting of the Central Finance and Economics Commission, requiring that “platforms” that have accumulated a large amount of data and have market appeal “to enhance regulatory authority. It also stressed that “oppose monopoly and prevent disorderly expansion of capital” and “strengthen the responsibility of platform enterprises for data security, and financial activities should all be included in financial supervision.”
On March 24, Reuters reported that the Communist Party’s unprecedented anti-monopoly campaign, which began late last year, may soon target other Internet giants. Jack Ma‘s Alibaba business empire has been the first to bear the brunt.
The Chinese Communist Party has vowed to tighten regulations on large technology companies, fearing they have the market power to stifle competition, misuse consumer data and violate consumer rights. The companies rank among the world’s largest and most valuable companies.
Ma Huateng, founder of Tencent Holdings, the Communist Party’s largest social media and video game company, was interviewed by officials from the Communist Party’s antitrust regulator in March to discuss the company’s compliance, the newspaper said, citing two sources.
Ma attended the two sessions in Beijing in March and went to the office of the Communist Party’s State Administration of Market Regulation (SAMR), the sources said. Ma was asked to meet with Gan Lin, deputy director of the State Administration of Market Regulation, and other senior officials, the two sources said.
The two sides discussed how Tencent Holdings could better comply with anti-monopoly regulations. Tencent Holdings has a market capitalization of US$776 billion, making it the highest individual stock in Hong Kong by market capitalization.
Wu Zhenguo, director of the anti-monopoly bureau of the Communist Party’s State Administration of Market Supervision and Administration, who also attended the meeting, expressed concerns about some of Tencent Holdings’ business operations and asked Tencent Holdings to comply with anti-monopoly regulations.
All three sources said Tencent is expected to be the next company to face stricter antitrust regulatory investigations.
Two of the sources said the State Administration of Market Supervision and Administration is gathering information and investigating WeChat‘s monopolistic practices and how the App undermines fair competition and squeezes out smaller rivals.
Late last year, the Communist Party’s Central Economic Work Conference suggested that one of the key tasks for 2021 would be to continue “anti-monopoly”.
The General Administration of Market Supervision of the Communist Party of China (GAMSC) subsequently imposed requirements on six major online platform operators, including Alibaba, Tencent, Jingdong, Meituan, Jindo, and Drip, to strictly comply with the “nine no’s”, including “no unfair competition to endanger the fair competitive market environment” and “no use of technical means to harm the order of competition. “The “nine no’s” anti-monopoly warning.
On February 2, 2021, Chinese short-video platform giant Jitterbug filed a formal complaint with the Beijing Intellectual Property Court against Tencent for monopoly. Jitterbug alleged that Tencent had restricted users from sharing content from Jitterbug through WeChat and qq, which constituted “abuse of dominant market position to exclude or restrict competition” as prohibited by the Anti-Monopoly Law. The lawsuit alleges that Tencent’s restriction of users’ sharing of content from Jitterbug through WeChat and QQ constitutes a “monopolistic act of abuse of dominant market position to exclude or restrict competition” prohibited by the Anti-Monopoly Law.
Jitterbug asked the court to immediately stop Tencent from blocking Jitterbug links on WeChat and QQ, and sought RMB 90 million in damages.
The lawsuit also states that WeChat and QQ have more than 1.2 billion and 600 million active users, respectively. According to the “2020 Data Report” released by Jitterbug, as of August 2020, Jitterbug’s daily active users exceeded 600 million; the average number of searches exceeded 400 million daily.
On March 12, the General Administration of Market Supervision of the Communist Party of China officially imposed administrative fines totaling RMB 6 million on 12 Chinese online companies, including Tencent and Baidu, for monopolistic acquisitions. It was revealed that Alibaba will also receive a “record” amount of higher fines.
Some economists believe that the game between regulators and tech giants involves a power duel between the shareholders behind the tech giants.
Weiran, the host, said that if we look at all the events together, Ma Huateng, like Ma Yun, is in a really bad situation. It is believed that there is still a lot of drama to come as to whether these two big tech giants are really entangled in the CCP power struggle and whether they can land safely.
Weiran believes that what Xi fears is that these people will make power and money deals and collude with each other to form a solid alliance of interests.
Huang Qiyuan, a veteran venture capitalist and now president of Landor Asia, told VOA that the CCP’s regulation does carry additional political considerations. If Ant succeeds in raising $35 billion, coupled with its user base of 800 million to 1 billion people, such a scale and power could overtake the CCP regime, which would spark fear in the CCP.
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