Radio France Internationale (RFI) recently reported that Chinese regulators on Friday slapped hefty fines on Alipay and Tenpay, owned by digital giants Ant Financial Services Group and Tencent. The China Securities Regulatory Commission announced that it would fine Ant Group and its subsidiaries RMB 7.123 billion yuan (around US$986.4 million), and fine its competitor Tenpay nearly RMB 3 billion yuan (around US$415 million). The two private groups dominate China’s payment system and have significant weight in the Chinese financial system. They are not subject to banking supervision and have thus long been thorns in the eyes of the authorities. China’s central bank, the People’s Bank of China, declaring in a statement following the action that the financial business rectification of large platform companies has now been completed.
The government’s crackdown on tech has cost the dynamic industry billions of dollars in market value over more than two years. Alibaba, the e-commerce giant that owns Ant Financial, became the first company targeted by authorities in late 2020 following public comments by Alibaba co-founder Jack Ma that angered the Chinese leadership. Ant Financial Services’ IPO, which was originally regarded as the largest fundraising in history (US$34 billion), was called off at the last minute. Later, the Chinese government started a tough crackdown on digital platforms across the industry including Tencent, Didi (aka Chinese Uber) and all private online education companies, particularly on issues such as personal data collection and protection, anti-competitive behavior, and raising funds abroad.
Source: RFI, July 8, 2023