Shares of Chinese mobile-game company Tencent Holdings (OTC:TCEHY) tumbled on the order of 6% today. That set the pace for peers like Alibaba Group Holding (NYSE:BABA), off 6.9%; Tencent Music Entertainment Group (NYSE:TME), down 7.3%; TAL Education Group (NYSE:TAL), off 4.2%; and DiDi Global (NYSE:DIDI), down 9.9% — just to name a few. The country’s regulators recently rekindled sweeping corporate crackdowns that first ramped up in November of last year. Now some of these companies are confirming that these limitations threaten their growth.
China’s State Administration for Market Regulation is at it again, so to speak.
After months of sporadic introductions of more regulation largely aimed at the country’s biggest tech names, the government’s regulatory arm unveiled new rules on Tuesday. These new regulations will make it easier for start-ups and smaller online businesses to compete by making it more difficult for larger, more established entities like the aforementioned Tencent Holdings and Alibaba to leverage their market dominance.
The new rules forbid (among other things) concealing negative online reviews or algorithmically collecting competitors’ data relating to sales made to consumers.