China’s internet antitrust surge leads to business-to-business clashes
Chinese internet companies have also gotten used to looking to the government. Their data and networks help the government monitor the public. They diligently follow official censorship guidelines and help state media to disseminate propaganda. They are now an integral part of the social control machine of the Communist Party. Tencent and Baidu declined to comment, and Alibaba did not respond to a request for comment.
With the government waving the antitrust stick, they could become even more subservient.
Last week Tencent ad a $ 7.7 billion fund dedicated to what he called “innovations of sustainable social value”. It would fund projects involving education, carbon neutrality and the revitalization of rural villages, many of which are favorite subjects for the party. Online, some commentators praised Tencent for its political savvy. A Weibo commentator joked that Tencent paid its antitrust fine up front.
Alibaba was once the most provocative in its dealings with regulators, who once looked elsewhere as the e-commerce giant intimidated its smaller competitors and suppliers. As recently as November 2019, an Alibaba executive defended his exclusionary practices in a Meet with the antitrust regulator. “There are always competitors who are mischievously speculating on the exclusive cooperative business model,” she said.
In October, Jack Ma, co-founder of Alibaba, publicly accused Chinese regulators of being too obsessed with controlling financial risk. A few days later, the authorities canceled the initial public offering of Ant Group, the financial subsidiary of Alibaba.
Alibaba’s attitude couldn’t be more different. After the regulator imposed the $ 2.8 billion antitrust fine, the company said it “accepts the sanction with sincerity and will ensure our compliance with our resolve.” Mr. Ma has kept a low profile since October.
Still, talking is cheap and platforms have done little to show that they are opening up. Tencent and Alibaba, for example, could start by allowing each other’s payment apps on their services. It would benefit consumers and show that they really want to obey the law. It could also discourage the government.
But so far none of these companies have announced any substantial action to correct the anti-competitive practices. Instead, they clash and maneuver through the corridors of power.