Alibaba has once again fallen foul of the Chinese government and has been fined 500,000 yuan (£57,000) for failing to submit relevant paperwork during an acquisition deal.
In the government’s latest bid to curb the dominance of Chinese tech giants, Alibaba, WeChat owner Tencent and Shenzhen Hive Box Technology have all been fined in relation to previous takeover deals.
China’s market regulator, the State Administration for Market Regulation (SAMR), said the fines weren’t related to competition threats, but rather because the companies failed to provide the correct paperwork for clearance.
“Investment and takeovers are important means for development and growth of internet companies,” SAMR said in a statement.
“The above-mentioned companies have a large influence in the industry, carry out many investments and takeovers, have specialized legal teams and should be familiar with the regulations governing M&A. Their failure to actively declare has a relatively severe impact.”
Alibaba, the world’s largest online retail marketplace, is understood to have failed to supply paperwork regarding equity investments in Chinese department store chain Intime.
It comes after the Chinese government blocked Ant Group, the Chinese fintech company founded by Alibaba’s Jack Ma and 33 per cent owned by Alibaba, from launching a record breaking $37 billion IPO on the Shanghai and Hong Kong stock exchanges.
This was understood to be the government’s opening gambit in a wider campaign to limit the dominance of such tech giants.
While these fines are minuscule in terms of the companies’ actual revenues, they are a clear signal that they will soon come under much tighter scrutiny.