In the News: Alibaba and Tencent Fined; Data Export Security Assessment; and Support for Manufacturers

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Alibaba and Tencent Fined

On July 10, China's State Administration for Market Regulation (SAMR) released 28 Administrative Penalty Decisions, levying fines of up to RMB 500,000 ($74,400) for each acquisition deal that was not duly disclosed.

Under the PRC Anti-Monopoly Law (中华人民共和国反垄断法) Article 26, transacting parties are obligated to disclose a merger or acquisition to authorities where there is a "concentration of business operators" which surpasses a threshold specified by the State Council. For instance, a reporting obligation arises where the total global turnover of all operators participating in the concentration exceeds RMB 10 billion in the previous fiscal year, and at least two of them have a turnover in China of more than RMB 400 million in the previous fiscal year. Here, 12 penalties were issued to Tencent regarding various acquisitions including of Okaybuy (China) Holding Inc. and DeepBlue Alpha Inc. Alibaba Investment Limited, the investment subsidiary of Alibaba, was issued 5 penalties, most notably regarding its takeover of Youku Tudou Inc. in April 2016. SAMR, however, concludes these deals will not have an exclusionary or anti-competitive effect on the market, hence will not be unwound or nullified.