HONG KONG (AP) – China’s market regulator said Monday it has fined Alibaba Group and a Tencent Holdings-backed company for failing to seek approval before making some acquisitions.
In the wake of the recent tightening of controls in the internet sector, it is also initiating a review of a merger of two online streaming platforms.
In a statement, China’s state administration of market regulation said Monday that Alibaba fined 500,000 yuan ($ 76,500) for increasing its stake in department store company Intime Retail Group to 73.79% in 2017 without authorization .
China Literature, an online publisher and e-book company spun off from Tencent, was fined the same amount for failing to apply for approval to acquire New Classics Media. Separately, Shenzhen Hive Box, supported by the Chinese courier company SF Express, was reprimanded for taking over China Post Smart Logistics.
China’s market regulator is also looking into the merger of two major Chinese game streaming platforms, DouYu International Holdings and Huya Inc. Tencent, the world’s largest game company that owns shares in both companies, is leading the deal and would have controlled 67.5% of the voting shares in the merged business.
The moves come amid increased scrutiny of monopoly behavior by internet companies. Last month, China released draft regulations to tackle anti-competitive practices in the industry, such as signing exclusive contracts with dealers and using subsidies to crowd out competitors.
“We hope that the operators realize that the antimonopoly law applies to all companies,” said the regulator in a separate statement.
“Platform companies are not outside of the antimonopoly law. Internet platform companies should strictly adhere to antimonopoly laws and regulations and maintain fair market competition, ”it said.
Alibaba and Tencent share prices both fell about 2.6% on Monday.
E-commerce giant Alibaba acquired InTime Retail to combine e-commerce and offline retail, while China Literature bought New Classics Media to expand its content offering.
Alibaba and Tencent, operators of the popular messaging service WeChat, are among the largest technology companies in China.
Neither company immediately responded to requests for comment.
China’s tightened control of internet companies reflects a similar focus on tech companies in the US, where lawmakers and regulators are investigating companies like Facebook and Google for anti-competitive practices. Earlier this month, the Federal Trade Commission accused Facebook of buying up its competitors in order to destroy them and wipe out competition. The FTC called for Facebook’s takeovers of WhatsApp and Instagram to be reversed.