Thread by @ruima

China tech antitrust thoughts:
1) Don't get the fintech rules confused w platform anti monopoly. These are two separate things.
2) Esp when you look at Ant's remedies (cutting off credit tech products from being tied to Alipay, personal credit license) it's clear it's abt risk.

3) SAMR & PBOC are two diff institutions w diff goals. It's unfortunate for Alibaba that both came down at same time, but if you look at history, SAMR reform been in the works for yrs. At least 4 yrs, and China is just following Europe/US, frankly.

4) Specifically u can find major revision to P.R.C. Anti-Monopoly Law in Jan. 2020. Sept. 2020 SAMR published Antitrust Compliance Guide for Operators. Even before then, btw, provincial level acts were published in 2H 2019 in Zhejiang (home of BABA) & other places.

5) Chinese anti-monopoly law just set up in 2008 (vs 1890 for US) & first case for tech was Qihoo 360 v. Tencent. Tencent won that one but actually changed its whole strategy to be the expansive minority stake empire it is today. (Another reason why I think it will be fine.)

6) Common antitrust practices:
a) Discriminatory pricing
b) Forced exclusivity (what BABA is fined over & what folks think Meituan will get in trouble for)
c) Bundling (this was forbidden by Jan 2019 but hasn't entirely disappeared, Ctrip was a big offender)

7) In July 2020, the first VIE antitrust case was approved. Previously, folks just left VIEs (most of China tech) alone. Old hands in China tech know the legality of VIE structures comes up for debate every few yrs, I'd say this further indicates China approves of VIEs.

8) Fines don't do much, frankly, which is why BABA stock price recovered so quickly. But I think there are some clarifications on how the govt is thinking abt regulating & how it's defining market abuses etc. that could be good for market.

9) Specifically, China govt looks to Europe / US a lot (the regulators btw often studied abroad!) so expect more of the same. I wrote abt this back in Dec. 2020 for @TechBuzzChina newsletter & think it largely holds:

insider.techbuzzchina.com/c/hot-topics/o…