China proposed measures to curb market concentration in its online payment market, potentially dealing another blow to financial technology giant Ant Group and its biggest rival Tencent Holdings.
The central bank said on Wednesday that any non-bank payment firm 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.
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 1 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.
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