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Tencent Faces Big Antitrust Fines In China

  • Leader
    Jun 19
    Tencent Faces Big Antitrust Fines In China

    Tencent Holdings will be hit with a big antitrust penalty in China, but it’s not likely to be as much as Alibaba's record $2.75 billion fine last month, Reuters reported, citing sources. As part of Chinese President Xi Jinping’s antitrust crackdown, Tencent will likely get fined a minimum of $1.54 billion by the State Administration of Market Regulation (SAMR), the sources told Reuters. To get more latest news about tencent, you can visit shine news official website.

    One of the biggest companies in China and the largest technology conglomerate, Tencent is being penalized for not reporting its previous acquisitions and investments and for anticompetitive behavior. The fine is capped at 500,000 yuan.

    "The attitude from the regulator is that, unlike Alibaba, you are not the biggest target here, but it would be impossible not to penalize Tencent now that the campaign is in action," said one of the sources, per Reuters.Tencent has a valuation of $776 billion compared to Alibaba’s $642 billion. SAMR hit Alibaba with a record penalty following a probe that revealed the company took advantage of having a dominant market position.

    Part of SAMR's investigation is centered on Tencent Music Entertainment Group, which went public in the U.S. almost three years ago, two of the sources said. Its business holdings include video games, content streaming, social media, advertising and cloud services.

    Chinese regulators told Tencent that aside from a fine, the company could be required to surrender exclusive music rights and to sell its music apps Kuwo and Kugou. The company’s central businesses — video games and WeChat — will likely stay the same, according to one of the sources.Tencent has said that it is cooperating with officials and following all regulations. The company doesn’t expect a hit to its overall business operation, but it will be subject to closer oversight.

    Tencent, ByteDance and Meituan are turning to former regulators for help navigating the new tech company mandates handed down by the Chinese government. For example, Cui Shufeng, a former deputy director of the commerce ministry’s anti-monopoly bureau, has served as Alibaba’s head of policy research since 2019.New regulations handed down last month will restrict the finance operations of Big Tech firms, including Tencent, Meituan and Didi.

    Chinese technology major Tencent has bought a stake worth $264 million (Rs 2,060 crore) in Walmart-owned Flipkart from co-founder Binny Bansal, through its European subsidiary, according to a news item first broken by news agency PTI.

    Binny Bansal holds around 1.84% stake in Flipkart after selling part of his stake to Tencent Cloud Europe BV. The transaction was completed on October 26, 2021 and was shared with government authorities at the beginning of the current financial year, the news report stated.Post the transaction, Tencent’s arm holds 0.72% stake in Flipkart, which is valued at around $264 million, as per the last valuation of $37.6 billion disclosed by the e-commerce firm in July 2021.

    Flipkart had raised $3.6 billion that time in a funding round led by Singapore’s sovereign wealth fund GIC, CPP Investments, SoftBank Vision Fund 2 and Walmart.A slew of investors like DisruptAD, Qatar Investment Authority, Khazanah Nasional Berhad, Tencent, Willoughby Capital, Antara Capital, Franklin Templeton and Tiger Global also participated in that round.

    Sources said the transaction took place in Singapore but Flipkart informed Indian authorities about it as a responsible entity, and that the transaction does not fall under the purview of ‘Press Note 3’, which calls for scrutiny of investment that any Indian company gets from countries sharing land borders with India.

    While there are several companies operating in India in which Tencent has made investments, the government has banned some gaming apps including PUBG Mobile and PUBG Mobile Lite, which were published by Tencent Group. E-mail queries sent to Flipkart and Bansal did not elicit any reply, according to the PTI report.