Alibaba, Tencent Fined By Chinese Regulator Over Non-Compliance With Anti-Monopoly Rules

China's State Administration for Market Regulation (SAMR) on Sunday imposed fines on technology giants Alibaba Group Holdings BABA and Tencent Holdings TCEHY, among other firms, for failing to comply with its anti-monopoly rules on the disclosure of transactions.

What Happened: The Chinese market regulator released a list of 28 deals that violated the rules, with five cases involving units of Alibaba, including the 2021 transaction for the purchase of equity in its subsidiary, the Youku Tudou streaming platform.

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Alibaba was slapped with 2.5 million yuan ($372,567) in fines and tech and gaming giant Tencent was fined a cumulative 6 million yuan ($896,245) over 12 acquisitions.

SAMR said it expeditiously disposing of the existing anti-monopoly cases in a bid to support the companies found in violation.

Emails sent by Benzinga to Alibaba and Tencent seeking clarification didn't elicit any response until the time of publishing this story.

Why It Matters: The Chinese government has been targeting the country's high-profile tech giants since late 2020 to check their dominant market positionings. The crackdown has resulted in billions being wiped away from the market capitalizations of big techs. Alibaba stock has begun to take a turn for the better recently amid hopes there would be a let-up in regulatory actions.

Price Action: The Hong Kong-listed stock of Alibaba plunged nearly 7% during the trading session on Monday, while Tencent fell about 3.29%. According to data from Benzinga Pro, Alibaba shares closed 1.22% lower in the U.S. on Friday, while Tencent shares trading over the counter lost 1.50%.

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