Tencent might take a big hit in Beijing’s next salvo at tech monopolies

Published (HKT): 2021.05.05 07:00

Chinese internet giant Tencent may be exposed to significant losses if Beijing continues its anti-monopoly campaign following unprecedented regulatory action against Alibaba and Meituan.

Tencent was among 34 internet companies that in April received warnings from China’s State Administration for Market Regulation to stop their anti-competition practices and to conduct self-evaluations within a month. The move came after regulators slapped a record 18 billion yuan (US$2.78 billion) fine on Alibaba for abusing its market dominance.

Apple Daily has found that Tencent, apart from the direct warning, owns a stake in nearly half of the 34 companies summoned before the regulators. Tencent has varying degrees of investment in 16 of the companies; by contrast, Alibaba is involved in only seven companies and its shares are generally smaller.

The 16 include Tencent’s online publishing arm China Literature and e-commerce site JD.com. It owns more than 50% of the former and nearly 20% of the latter. Tencent is also an investor in search engine Sogou, video app Kuaishou and discount retailer Vipshop.

Reuters reported last week that China was going to fine Tencent at least 10 billion yuan, particularly targeting its music streaming business.

In February, Tencent was sued for “monopolistic behavior” by a competitor, ByteDance’s short video app Douyin. Tencent “abused its dominant market position to exclude and restrict competition” via its WeChat and QQ apps, Douyin argued at the time.

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