The Chinese government is moving to curb the power of some of China’s most influential internet companies. The country’s top market regulator has fined Alibaba and China Literature i.e. Tencent’s e-book spinoff, for failing to report their past acquisition deals for clearance.
The firms are each subject to a fine of 500,000 yuan ($76,000). Though a paltry amount compared to the size of the companies’ multi-billion-dollar deals, the penalty is expected to sound an alarm to other industry players said a spokesperson for the market regulator.
Alibaba has in recent years been expanding into offline retail, in part through aggressive acquisitions. Tencent, which has built up a digital entertainment empire, has similarly invested in outside partners to help broaden its territory. The companies failed to seek regulatory clearance though neither deal was deemed to be “excluding or restricting market competition.”