China drafts new antitrust guideline to rein in tech giants, wiping US$102 billion from Alibaba, Tencent and Meituan stocks

Draft guideline ‘targeting tech giants’ in e-commerce, online food delivery and ride hailing, Atta Capital’s Alan Li says

Tech giants plunge broadly in Hong Kong trading on Tuesday, with Meituan and JD.com both down by more than 8 per cent

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China is seeking to curb monopolistic market practices as a handful of technology companies begin to control every sphere of economic life. Photo: Handout

Published: 1:45pm, 10 Nov 2020Updated: 10:41pm, 11 Nov 2020

China has released a draft antitrust guideline to rein in internet-based monopolies, signalling policymakers’ heightened concerns over the growing power, influence and risks of digital platforms and their market practices in the economy. The move immediately erased about US$102 billion of market value from Alibaba Group Holding, Tencent Holdings and Meituan.

Monopolistic practices by internet platforms, such as demanding vendors to transact only on one platform exclusively, or providing differentiated prices to customers based on their shopping history and profiles, could potentially be outlawed, according to the guideline released by the State Administration for Market Regulation on Tuesday.

This is the first time the market regulator has attempted to define what constitutes anti-competition practices among internet companies under the law. An overhaul to the Anti-Monopoly Law in January went only as far as tweaking the language to encompass internet companies. It will seek public opinion on the draft until the end of November.