China targets tech giants through Anti-Monopoly Law

Chinese financial regulators in November 2020 accused Ant Group, previously Alipay and the world’s largest fintech company, of exhibiting monopolistic behaviour and failing to meet regulatory requirements. The regulators suspended the company’s initial public offering two days before the D-day. The fintech giant was then ordered to immediately comply with a list of requirements.

Ant Group is the first of its kind to receive this kind of antitrust treatment from the government. This is a follow-up of the Anti-Monopoly Law by the State Administration for Market Regulation (SAMR). In the beginning of this year, antitrust officials started investigating more tech companies.

This year, Chinese financial regulators commenced investigation into Alibaba. They went as far as interviewing the company’s staff members and downloading the chat record from Alibaba internal communication platforms. They are also authorised to do as much as but not limited to taking any data to surprise raids. Up to 30 tech companies are asked to self-rectify and report to SAMR.

Lawyers and tech insiders reported that the public is angry at the fact that powerful tech companies, especially those that became essential when the nation hit its lowest point during the pandemic, have not shared their profits rightfully with their overworked couriers and drivers. Through this action, the regulators are seeking to observe fintech operations and worker treatment more closely. The antitrust enforcement is deemed as a way to put a rein on companies and prompt them to follow standards and the most effective behaviours.

Chinese regulators are now striving to move fast down this path to catch up with EU and US regulatory norms.