China’s tech giants have already lost nearly $ 260 billion in market value in the past two days, after Beijing pressed ahead with legislation to curb the growing power of these listed companies.
Shares in Alibaba, Tencent, JD.com, Meituan and Xiaomi have fallen as much as 8% after falling in the previous session. Alibaba lost 9.80% to HKD 248.40 (HKD), JD.com lost 5.63% to US $ 80.08 in the US and 9.20% to HKD 300 in China, Meituan fell 9.67% to HK $ 271, Xiaomi lost 8.18% to 22.45 Hong Kong dollar.
On Tuesday, the Chinese government unveiled legislation aimed at combating monopolistic practices in the Internet industry, after years without interfering in this sector. The new rules aim to avoid anti-competitive practices, such as collusion to share sensitive consumer data, and alliances that stifle small competitors or support services and make them available at less than cost, even eliminating competition.
Regulators will be interested in the reach of these companies, which are already operating in more sensitive sectors like finance and health. “The great Chinese technology companies should rethink their business models,” says Anjie Law Firm. The philosophy of internet companies is that the winner wins everything, especially in the platform operators, who aggregate similar traffic and build similar ecosystems with each other, ”the same company continues to Bloomberg.
Predictions from investment house Chanson & Co indicate that these measures may discourage companies in the sector from quoting in the Chinese market. And last week, the same CEO interfered with plans for a major representative of the sector, Ant Group, which was preparing to go public, with a $ 35 billion issue. According to a statement cited by Bloomberg, the Shanghai Stock Exchange has suspended entry into the group due to regulatory issues. China argues that the company, run by entrepreneur Jack Ma, will be subject to the same capital and leverage restrictions as banks.