According to the notice, the firms will be fined $76,000
The Chinese government will fine Alibaba and Tencent’s e-book spinoff over failure to report previous acquisition deals for clearance.
This comes as the government initiates the move to limit the power held by some of the most influential companies in the country.
The cases involve the acquisition of New Classics Media, a film studio by China Literature, and the investment in equity by Alibaba in major Chinese mall operator Intown.
The Chinese government will use the penalty as a warning to other industry players.
In the recent past, the internet giant, Alibaba has been expanding into offline retail, and so has Tencent. While this is a good move, the companies did not seek clearance despite the fact that neither of these deals was preventing market competition. As a result, the companies were subjected to a fine as opposed to a breakup.
China Literature is currently working on clearance and compliance certification requirements.
This marks the first time that the Chinese government has fined variable interest companies due to market concentration violations.
Meanwhile, the government is investigating the merger between Douyu and Huya, which are among the biggest game streaming providers in the country.
We’ve reported that Alibaba and BMW signed a Memorandum of Understanding (MoU) for a strategic partnership in Beijing.