SHANGHAI -- Chinese authorities have stepped up enforcement of antitrust rules, with the number of violations cited in 2020 doubling on the year, as Beijing moves to rein in Big Tech companies' rising influence in the online economy.
The number of antitrust investigations completed in 2020 totaled 108, according to the State Administration for Market Regulation, compared to 46 cases the previous year. The policing extended across a wide range of industries, including automotive and energy, but the crackdown against the tech industry was most notable.
Ant Group, the financial arm of Alibaba Group Holding, suspended a planned double listing in Hong Kong and Shanghai in November due to an abrupt shift in regulatory policy. Authorities have faulted Ant for unsound corporate governance, a sign that President Xi Jinping's government is intent on curbing Ant's expanding role in the financial markets.
During last Friday's opening of the annual National People's Congress, Premier Li Keqiang touched on monopolies in the government work report.
"China will strengthen anti-monopoly efforts and contain disorderly expansion of capital, and ensure fair market competition," said Li. The premier also pledged tougher oversight on the fintech industry, in what many see as a thinly-veiled reference to Ant and other tech giants.
As part of the effort, China looks to amend its anti-monopoly law this year, according a list of legislation subject to revision submitted Monday by the National People's Congress standing committee. A spokesperson for the committee signaled its plan last December by announcing that lawmakers will deliberate revisions to the law.
Meanwhile antitrust authorities have aggressively gone after tech companies in recent months.
In December, regulators fined Alibaba and a Tencent Holdings subsidiary for failing to secure proper approval for past acquisitions. Last week, they levied fines against Pinduoduo, Meituan and three other e-commerce platforms for engaging in anti-competitive pricing practices.
Authorities have also launched an investigation against Alibaba for pressuring vendors to exclusively list on the company's e-commerce platform, among other complaints. Agents raided Alibaba's headquarters in December, and the probe appears to be ongoing since an outcome has yet to be announced.
Additionally, the State Administration for Market Regulation last month issued a notice to regulatory agencies nationwide to toughen monitoring. The State Council, China's cabinet, implemented guidelines that same month restricting anti-competitive practices by enterprises and the collection of personal data.
In Zhejiang Province, where Alibaba is headquartered, a system that polices corporate malpractice went online at the end of February. Powered by artificial intelligence, the program checks price trends at grocery stores and rural neighborhood markets, and compares them to prices on e-commerce platforms. Authorities will be alerted to excessive discounts and other misconduct.
An AI program also checks online postings daily for information suggesting that bigger companies are squeezing vendors. The online watchdog reportedly oversees more than 20 enterprises that operate platforms, along with data linked with roughly 10,000 associated businesses.
Chinese tech giants control substantial market shares, which have brought into sharp relief the pressure they put on micro-to- midsize businesses. Critics say the expanding influence of Alibaba and Tencent has caused material damage.