Big Tech drags China markets as regulators spook internet sector
06:39, 17 August 2021
China’s big tech stocks tumbled on Tuesday after Chinese regulators released a set of draft regulations aimed at preventing unfair competition in the internet sector and protecting private consumer information.
State Administration for Market Regulation (SAMR) said platform operators will be not allowed to use algorithms, big data and other technological methods to affect consumer choices or to stifle market competition, state-affliated English daily Global Times reported, citing the official statement in Chinese.
Gaming-to-music services firm Tencent Holdings dropped 4.3%, online food delivery platform Meituan fell 3.6%, search engine Baidu’s Hong Kong-listed shares declined 5.5%, and video sharing app Bilibili plunged over 7% on Tuesday.
HK and Mainland China indices fall 2%
The slump in internet stocks dragged the Hong Kong benchmark Hang Seng index by nearly 2% on Tuesday.
The Hang Seng TECH index, which tracks the top-30 technology stocks listed on the Hong Kong Stock Exchange, dived 3.2%.
Meanwhile, China’s blue-chip CSI 300 index lost 2% to hit an over two-week low on Tuesday.
What is your sentiment on BTC/USD?
Alibaba Group’s 2021 slump
Earlier in April, e-commerce giant Alibaba Group was slapped with a record $2.78bn antitrust fine after the SAMR found the company guilty of monopolistic practices including preventing its merchants from selling on other online platforms.
As of Monday’s close, the Hang Seng TECH index and Hong Kong-listed shares of Jack Ma-founded Alibaba Group had fallen over 23% each in 2021.
On Tuesday, Alibaba Group further fell by 4.8% after the SAMR called for an end to marketing practices like fake reviews and coupons, spreading misinformation about competitors and illegal use of use other business operators’ data, according to Reuters.
Tencent’s anti-trust woes
Tencent Holdings has also been on the forefront on Beijing’s anti-trust crackdown.
The company’s music arm Tencent Music was forced to give up its exclusive music rights, while the merger of its video game streaming sites Huya and Douyu was blocked on anti-monopoly grounds.
The SAMR has solicited public opinion on the draft, with public feedback open till 15 September.