HONG KONG/SHANGHAI (Jan 20): China proposed measures to curb market concentration in its online payment market, potentially dealing another blow to financial technology giant Ant Group Co and its biggest rival Tencent Holdings Ltd.
The central bank said on Wednesday that any non-bank payment company with half of the market in online transactions or two entities with a combined two-thirds share could be subject to anti-trust probes, according to draft rules released by the People’s Bank of China.
If a monopoly is confirmed, the central bank can suggest the cabinet impose restrictive measures including breaking up the entity by its business type. Firms already with payment licenses would have a one-year grace period to comply with the new rules, the PBOC said.
The rules present the strongest and most detailed message yet of regulators’ plans to curb monopolistic practices in the online payments industry. Ubiquitous in China, Ant and Tencent have transformed how consumers shop through their mobile apps that are used by a combined one billion people.
The regulator also vowed “comprehensive” oversight of companies in the space, and their transactions with affiliated parties. It will step up supervision of any changes to shareholders or beneficiaries at payments firms, it said.
“This shows there’s no let-up in regulatory tightening on the sprawling fintech businesses,” said Dong Ximiao, a researcher at Zhongguancun Internet Finance Institute.
Regulators shocked markets in November by suspending billionaire Jack Ma’s record initial public offering of Ant, as they stepped up oversight. Ant has since been ordered to overhaul its business and an antitrust investigation was launched into affiliate Alibaba Group Holding Ltd.