Posted inHeavy Hitters

Tencent, Alibaba’s Hema, Didi pledge to comply with anti-monopoly rules

by Louis Hinnant Apr 15, 2021Apr 15, 2021

Tencent’s ultra-modern headquarters loom over Shenzhen’s Nanshan District. (Image credit: TechNode/Jiayi Shi)

Tencent, Didi Chuxing, and Alibaba’s grocery unit joined Chinese tech peers in promising on Thursday to uphold rules against anticompetitive behavior amid a sweeping crackdown across the sector that began with e-commerce giant Alibaba.

Why it matters: In the wake of Alibaba’s RMB 18.2 billion ($2.8 billion) fine for using “forced exclusivity” tactics, regulators are sharply reining in China’s biggest internet companies.

READ MORE: What is ‘forced exclusivity’? And why did it get Alibaba fined $2.8 billion?

Details: On Tuesday, the Chinese State Administration for Market Regulation (SAMR) convened with the Central Cyberspace Administration of China and the State Administration of Taxation regarding China’s biggest internet companies.

• Tech firms were ordered to complete self-inspections within one month, in line with “five preventions” and “five guarantees” laid out during the meeting.
• Gaming and social media behemoth Tencent promised to abide by the provisions of the Anti-Monopoly Law, filter out illegal advertisements, refrain from illegal collection and misuse of personal information, and protect intellectual property rights. 
• The rest of the 11 companies that issued on Thursday pledges to comply include some of China’s top tech firms such as ride-hailing platform Didi Chuxing, short video app Kuaishou, entertainment platform Bilibili, online travel agency Trip.com, and Alibaba’s supermarket chain Hema.
• Covering a variety of internet market segments, all company letters contained commitments to anti-monopoly practices and fair competition.

Context: The regulatory crackdown on anti-competitive practices started late last year with small antitrust fines for Alibaba, Tencent and others, culminating in Alibaba’s record penalty on Saturday.

• The meeting on Tuesday between regulatory bodies addressed topics such as antitrust regulation and the practice of “forced exclusivity” notably used by Alibaba, where it imposed penalties on merchants if they operated outside of Alibaba’s ecosystem.