China's State Administration for Market Regulation on Friday announced harsh penalties on seven tech companies for failing to report past mergers and acquisitions in advance for antitrust review.
Tencent alone accounted for a third of the nine listed offenses. Car-hailing unicorn Didi Chuxing is also among the offenders, each fined $77,226 for the breach, the maximum currently allowed under China's Anti-Monopoly Law.
For years, tech companies got away with not reporting large merger deals for antitrust review. They won't anymore, as Chinese antitrust regulators are sharpening their knives to rein in Big Tech. Since last December, regulators have fined 11 companies, including Tencent, Baidu Alibaba and ByteDance for failing to disclose past acquisitions and investments.
Offenders will be slapped with harsher penalties for similar violations in the future. Last November, Beijing issued draft amendments to the country's Anti Monopoly Law that are expected to go into effect this year. Under the new rules, these violations could incur fines as high as 10% of the disciplined firm's revenue from the previous year — a potentially astronomical sum.
The harsher fines could spell particularly serious trouble for Tencent, which has been fined at least five times since December for failing to report acquisitions to antitrust regulators for review, and has acquired many other companies whose acquisitions have not yet been subject to penalties.