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China’s tech giant Tencent fined again for failing to report wine deals

Tencent has been penalised for the second time for violating antitrust laws related to a wine deal.

Continuing the crackdown on monopolies, China’s top market regulators have slapped a new round of fines this year on the country’s tech giants including Tencent, Alibaba and Bilibili, in which Tencent has been penalised for the second time for violating antitrust laws related to a wine deal.

On January 5, the State Administration for Market Regulation (SAMR) announced its penalty over 13 deals in total, each with the maximum fine amount RMB 500,000 (US$ 78,610) under China’s current antitrust law.

The penalty is a part of the ongoing antitrust crackdown campaign on tech companies started in 2020, when the SAMR closed 109 monopoly cases with penalties totaling RMB 450 million (US$70.7 million). In 2021, China also amended its Anti-Monopoly Law for the first time with increased penalties and boosted the headcount in the SAMR in October.

Jiu Xiao'er, a drinks delivery service platform, is attracting attention and money from tech giant Tencent. (pic: Internet)
Jiu Xiao’er, a drinks delivery service platform, is attracting attention and money from tech giant Tencent. (pic: Internet)

Among the three punished tech giants, Tencent was fined by SAMR on December 31 last year for failing to declare the concentration of business operators in its acquisition of Jiu Xiao Er, an online wine retailing company based in Nanning of southern China. 

As reported by state-owned Global Times, Tencent was handed nine fines for a total of RMB 4.5 million (US$707,302) in this round.

Jiu Xiao Er is an alcohol beverage delivery platform selling more than 1,000 types of drinks including beer, wine, baijiu and liquor in China, as shown on its official website. The platform’s selling point is to offer fast deliveries within 25 minutes by coordinating call centres and popular shopping platforms such as Meituan, JD.com and Wechat Mall.

Tencent has reportedly completed the acquisition in November 2020, as we have reported with Sequoia Yuchen, an investment company established in 2019. It is based in Shenzhen of southeastern China, and focuses on the investment and management of healthcare, consumer goods or service industries.

The new round of fines arrived just about a month after Tencent’s previous penalty last November. The leading tech player was fined the same amount for not reporting its US$80 million investment on Yijiupi, a start-up B2B platform for wine and spirits in China.

“These fines are significant, as they show the antitrust authorities will continue their trend of aggressive enforcement in the new year, in response to Xi’s call to contain the barbaric growth and disorderly expansion of the platform companies last year,” Henry Gao, an associate professor of law at Singapore Management University, told SCMP.

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