China's market regulator reportedly hits Didi Chuxing with anti-trust probe amidst IPO-filing

Chinese ride-hailing company Didi Chuxing has reportedly been hit with an anti-trust probe by China's market regulator, the State Administration for Market Regulation. According to multiple media reports including Reuters and Radio Television Hong Kong, the regulator is investigating whether Didi engaged in any anti-competitive practice that "unfairly squeezed out" smaller rivals.

China's market regulator is also investigating whether there is adequate transparency in the pricing mechanism used by Didi's ride-hailing business, Reuters said quoting its sources. Meanwhile, Didi Chuxing said in its IPO filing to the US Securities and Exchange Commission on 10 June that China's market regulator met with more than 30 major Internet companies in the country, including the company itself, in April. The companies were required to conduct a self-inspection within one month to identify and correct possible violations of anti-monopoly, anti-unfair competition, tax and other related laws and regulations.

"We have completed the self-inspection and the relevant governmental authorities have conducted onsite inspections of our company," Didi said in the filing. It also said it cannot assure that the regulatory authorities will be satisfied with its self-inspection results or that it will not be subject to any penalty with respect to any violations of anti-monopoly, anti-unfair competition, pricing, advertisement, and privacy protection, among other laws. 

According to the Wall Street Journal, Didi's IPO could bring a valuation of more than US$70 billion. Quoting its sources, WSJ said Didi is predicted to raise about 8% to 10% of the valuation amount in the offering. The money will be channelled into investments for technology, expanding its business outside of China and rolling out new products. The antitrust probe into Didi is the latest in a list of crackdowns that China is engaging in against tech firms. 

In April, China's market regulator slapped Alibaba Group with a US$2.8 billion antitrust fine. In that same month it also prepared "a substantial fine" for Tencent Holdings, Reuters reported. A month later, the Cyberspace Administration of China found 105 apps to have violated laws by "excessively collecting and illegally accessing users’ personal information", the Associated Press said. The apps include Douyin, Bing and LinkedIn.

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