Tech Monopolies Under Scrutiny

On July 10, the State Administration for Market Regulation announced it had prohibited the merger of the Tencent-backed game streaming platforms Douyu and Huya for fear that it would create a monopoly. This is the first time the market regulator has halted a merger in the internet sector since the Anti-Monopoly Law came into effect in 2008. In April, the market regulator imposed a penalty of 18.23 billion yuan (US$2.8b) on e-commerce giant Alibaba for abusing market dominance. That was a case of punishment after the fact as it came after the deal was done. The Tencent merger ban is more likely a case of early intervention. These two cases involving the country’s two largest internet companies show that post-punishment and early intervention have become the main forms of anti-monopoly measures, even though early intervention is relatively rare in antitrust law enforcement.