After Alibaba and Tencent, Chinese authorities have zeroed in on another super-performing tech entity by launching an anti-trust probe. The country's market regulator has launched the probe against ride-hailing behemoth Didi Chuxing ahead of its planned IPO.
The State Administration for Market Regulation (SAMR), in its latest crackdown on anti-trust violations by new age conglomerates, said it is probing whether Didi squeezed out smaller rivals by employing unfair practices, Reuters reported, citing sources.
Pressure on 'Platform Companies'
The probe comes even as Didi is going ahead with its initial public offering in the United States in the coming months. Earlier, China had slapped crippling probe into other "platform" companies like Alibaba Group and Tencent Holdings.
"We do not comment on unsubstantiated speculation from unnamed source(s)," Didi said in an emailed statement to news agency Reuters.
How Big is Didi?
Didi is the world's largest mobility-technology platform. It operates in 15 countries and has more than 493 million annual active users globally. Apart from ride-sharing, the company also operates related businesses like electric vehicle charging networks, fleet management and car making.
According to the company's prospectus, it employs about 13 million annual active drivers.
Uber Technologies Inc has as much as 12.8 percent stake in Didi. The US firm had earlier sold its operation to Didi in exchange for a minority stake.
Apart from Uber, huge technology investment firms like SoftBank Group Corp have stake in Didi. Chinese internet giants like Alibaba and Tencent have also invested in Didi.
According to Reuters, Didi's planned IPO is expected to be the biggest Chinese IPO in New York since Alibaba's $25 billion float in 2014.
Beijing's antitrust watchdogs said in March they were looking at the possibility of forcing Tencent to overhaul its fintech division and bring its operations under a holding company. The government regulators were scrutinizing every aspect of Tencent's operations.
The report adds that the threat of impending action by Beijing has already led to the wiping out of as much as $170 billion from the company's value.
Tencent and Alibaba
The officials of the State Administration for Market Regulation had already made Tencent founder Pony Ma to sit down with them to discuss compliance at Tencent. The officials have expressed concern over Tencent's business practices, the report said, adding that they pressed the company on adhering by antitrust rules.
It was reported in the same month that the CCP government was moving ahead to impose a $1 billion fine on Jack Ma's e-commerce behemoth Alibaba after months-long investigation into alleged violation of monopoly rules.
By the end of December last year, there were reports that the Chinese government was planning to nationalize Alibaba, Jack Ma's flagship company, as well as Ant Group. The news frenzy was kicked off after China's investigators set up an office at the Alibaba headquarters in November.