2023-07-07 17:29:53
The regulator has imposed heavy fines on Tencent and Ant Group, which each own a popular payment system, suggesting the end of a tightening of the screws on tech.
The regulator imposed heavy fines on Friday in China for digital giants Tencent and Ant Group, which each have a popular payment system, suggesting the end of a turn of the screw targeting tech.
The authorities had taken a very dim view that two private groups, which largely dominate payment systems in China, might have such a weight in the financial system, and are not subject to banking regulations.
Ant Group is the owner of Alipay, a popular phone payment system in China, where cash is now used very little. The company also offers financial services.
Its main competitor is WeChat Pay, owned by internet and video game giant Tencent.
Ant Group is fined 7.1 billion yuan (around 900 million euros), the regulator announced on Friday.
The decision was taken “in view of illegal and regular acts committed by Ant Group (…) in recent years” particularly in banking and consumer protection, writes the regulator.
“We will respect the sanction”, immediately reacted Ant Group in a press release.
“Under the guidance of financial regulators, Ant Group has proactively led a rectification of its problematic businesses,” the company added.
“Issues rectified”
Its competitor Tencent will have to pay it nearly 3 billion yuan (around 379 million euros) for violations, the regulator also announced.
“Most of the outstanding issues in the finance business [des entreprises du numérique] are now rectified”, he welcomed, suggesting the end of the vast recovery in hand in China in the technological sector.
The turn of the screw aimed at tech has caused this dynamic sector to lose billions of dollars in market capitalization in recent years.
Ant Group, which was then owned by e-commerce giant Alibaba, was the first company to suffer the punishment of the authorities at the end of 2020.
They had stopped at the last minute what should have become the biggest fundraiser in history ($34 billion).
The following month, Alibaba was investigated for impeding competition, then sentenced to a heavy fine (2.3 billion euros).
These measures had marked the beginning of a brutal tightening of regulations in the technology sector, which had severely penalized the profitability of the digital giants.
End of turbulence
The power has since been intransigent once morest digital companies, in particular on issues of collection and protection of personal data, anti-competitive practices but also fundraising abroad.
In 2021, Didi, the “Chinese Uber” was thus sentenced by the regulator to a fine of around 1.2 billion euros, in particular for offenses relating to personal data.
The company, champion in China of the reservation of cars with driver, had maintained in 2021 a fundraiser in New York, despite the reluctance of the Chinese authorities in a context of geopolitical tensions with the United States.
This stubbornness had provoked the dissatisfaction of Beijing, which feared in particular a transfer of sensitive data to American soil.
The sanctions unveiled on Friday mark the end of several years of turmoil in the technology sector.
Alibaba shares ended Friday up more than 3% on the Hong Kong Stock Exchange, anticipating an imminent announcement from the regulator. In New York, following the decision of the Chinese authorities, it took 5.59% at the start of the session on Wall Street, the market seeing the end of the uncertainty weighing on this company.
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