Beijing moves to crack down on tech firms, sending shares lower
Chinese tech stocks have come under intense pressure after Beijing published draft antitrust regulations aimed at the country's biggest internet companies.
Alibaba Group Holding Ltd
7,540.00p
16:30 03/05/24
ALPHABET-A
$168.10
13:10 06/05/24
Amazon.Com Inc.
$188.70
13:10 06/05/24
Nasdaq 100
18,093.57
12:15 06/05/24
TENCENT HLDG
HKD365.79
11:15 01/04/19
Published by the State Administration for Market Regulation, the draft rules look to define anti-competitive behaviour in the sector for the first time. They include stopping companies sharing sensitive consumer data or working together to exclude smaller rivals. They also aim to ensure customers are not treated differently based on their data or spending habits.
Should they be enacted, the draft rules would hit Chinese giants such as tech conglomerate Tencent, food delivery company Meituan, retailer Alibaba and Ant Group. Tencent lost 7% in Hong Kong after the draft regulations were published, while Alibaba and Meituan both tumbled 10%.
Fintech specialist Ant Group was set to raise a record $37bn by floating on the Hong Kong and Shanghai markets, but the initial public offering was delayed last week after Beijing abruptly halted the debut.
Beijing is not alone in looking to curb internet companies. On Tuesday, the European Commission launched a second formal probe into Amazon, while in the US, antitrust charges were brought against Google last month.
Rony Nehme, chief market analyst at Squared Financial, said: "Big tech has been the winner from Covid, but the vaccine kill the virus and growth in this sector? China and the European Union are launching antitrust cases against big tech, and the Biden administration could get tougher in the new year. These questions are putting the Nasdaq under pressure, with it falling a further 1.37% yesterday."
The SAMR is seeking feedback on the proposals, with a deadline of 30 November for submissions.