The central bank of China is planning to “deepen” its mobile payments-focused antitrust probes, even though it has seen “interim progress” in the last year, its deputy governor said on Friday (Sept. 24), according to a South China Morning Post report.
The move is part of the country’s continued effort to tamp down the power of Big Tech in the country and reduce the risk of those companies gaining traction there.
“The antitrust actions in the payment sector need to deepen,” Fan Yifei told the China Payment and Clearing Forum in Beijing, according to the SCMP report. “The central bank will persistently urge platform companies to rectify their payment businesses.”
China’s digital economy is the second-largest in the world behind only the U.S., at $5.4 trillion last year, up 9.6% from 2019.
Non-banking payment agencies – including Tencent’s WeChat Pay and Ant Group’s Alipay – handled 294.6 trillion yuan (US$45.6 trillion) in 827.3 billion transactions in 2020, up by 17.9% and 14.9%, respectively, from 2019 figures, according to central bank data.
“The central bank will support platforms to focus on their core businesses and innovation, but firmly oppose their disorderly expansion, unfair competition, data misuse and other violation of consumer interests,” Fan said, according to The Beijing News.
People’s Bank of China Governor Yi Gang ordered payment firms to cut off any “inappropriate link” with financial products outside their core businesses. The central bank, meanwhile, wants internet firms to open their payment scenarios to each other for the purposes of consumer choice.
The central bank has fined banks 1.13 billion yuan (US$175 million) over payment irregularities in the last five years, and has also nullified more than two dozen third-party payment licenses.
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China’s continuing regulatory crackdown has also triggered fines against Big Tech firms, along with canceled mergers and halted public offerings. Alibaba was hit with a $2.8 billion antitrust penalty in April, and food delivery platform Meituan is under investigation for alleged anticompetitive behavior. Tencent’s merger with Huya and DouYu was stopped, and Ant Group’s IPO was blocked.
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The Chinese government has also taken 1% equity stakes in firms including ByteDance and Weibo in a symbolic move to show the companies that federal leaders still wield power.
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