Home » China reportedly launched antitrust probe into IPO-bound Didi

China reportedly launched antitrust probe into IPO-bound Didi

by MD Samsuzzaman Siyam

China’s market regulator has begun an antitrust probe into Didi Chuxing, three people with knowledge of the matter said, just as the ride-hailing giant is pushing ahead with what could be the largest initial public
offering in the United States this year.

The probe, reported here for the first time, is the latest in a sweeping crackdown on China’s so-called “platform” companies, including Alibaba Group and Tencent.

China’s market regulator, the State Administration for Market Regulation (SAMR), is investigating whether Didi used any competitive practices that squeezed out smaller rivals unfairly, two of the three sources said.

The regulator is also examining whether the pricing mechanism used by Didi’s core ride-hailing business is
transparent enough, the three sources said.

Didi declined to comment. SAMR did not respond to requests for comment.

In its IPO prospectus made public last week, Didi disclosed that it and more than 30 other Chinese internet companies had met with regulators, including the SAMR, in April. The regulators asked the companies to conduct a “self-inspection” and submit compliance commitments, it said.

The companies were asked to identify and correct possible violations of antimonopoly, anti-unfair competition, tax and other related laws and regulations, Didi said in the filing.

Didi said it had completed the self-inspection and the “relevant governmental authorities have conducted onsite inspections.”

It warned that regulatory bodies might not be satisfied with the inspection results and the firm may be subject to potential penalties.

Two of the sources familiar with the situation said that the probe by the markets regulator was in the initial stages, and that the regulator was yet to give the company detailed instructions.

The impact of the probe on the company’s IPO, expected to be the biggest Chinese IPO in New York since Alibaba’s $25 billion float in 2014, remains to be seen.

One of the sources said Didi believed pricing and unfair competition would be viewed as relatively minor offenses, which had given the company enough confidence to move ahead with plans for the IPO.

Antitrust crackdown

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