Alibaba and Tencent fined in China for breaching antitrust regulations

After not responding to the summons of the Chinese regulatory authorities, to make their transactions transparent in accordance with the established antitrust rules, Alibaba and Tencent, important technology companies of the Asian giant, were fined.

After these sanctions were announced yesterday, today the shares of both companies fell sharply on the Hong Kong Stock Exchange.

Alibaba and Tencent fined for not adhering to antitrust regulations

Alibaba, the e-commerce giant known for its namesake platform and AliExpress, posted a 6.8% drop in the value of its shares. For its part, Tencent, a company dedicated to the development of video games and social networks, registered a drop of 3.2%, according to what was reported in a report from Bloomberg.

Although the emergence of a new Covid outbreak in Shanghai is also considered a factor, the decline in these indices is mainly attributed to a determination by the State Administration for Market Regulation of China, which published a list of 28 standard agreements on Sunday. antitrust laws that were violated by the aforementioned companies.

Although other companies were also alluded to, the Chinese regulator’s list included five of Alibaba’s transactions and 12 of Tencent’s. For each offense committed, the maximum fine was 500,000 yuan, approximately 73,600 euros.

Unsurprisingly, the application of these sanctions generated a far-reaching crackdown on the technology sector, manifested in the hit to share prices in Hong Kong and Shanghai. Before today’s losses, attributed to the aforementioned fines, were recorded, Alibaba’s shares had risen 70% and Tencent’s 18% since mid-March.

Although the impact of this situation was felt, experts agree that its economic impact is circumstantial and potentially reversible. “The drop is likely to be temporary. The market was more wary of the United States raising interest rates so sharply, but the new fines have overtaken it.”, told the Associated Press Francis Lun, investment manager and veteran market commentator in Hong Kong.