Upstox ropes in Thippesha Dyamappa from Amazon as CTO

Beijing’s decision to block Tencent’s Douyu-Huya merger deal marks end of freewheeling internet era in China

The Chinese government had never said no to a merger deal in the country’s technology sector until last Saturday when the State Administration for Market Regulation (SAMR) blocked Tencent Holdings’ plan to merge Douyu and Huya, two video game live-streaming websites it controls.

Analysts says Beijing’s veto is a clear sign that the Chinese authorities are no longer shy to act on antitrust issues, putting an end to a freewheeling era in which Big Tech companies were able to engage in aggressive merger and acquisition activity to achieve market dominance.

Moreover the decision to reject the merger, which would have created a video game streaming behemoth worth more than US$10 billion allowing Tencent to take on Amazon’s Twitch, sets a precedent with far-reaching implications for the country’s internet industry.

“This is the first case involving internet platforms, a sector where antitrust authorities have long been very careful when it comes to making decisions relating to what would constitute a ‘concentration of business operators’,” said Laura Wei, lawyer at W&H Law Firm. “In this case, the antitrust authorities have made a comprehensive assessment of how the merger is likely to have an extremely adverse impact on competition.”

In a regulatory ruling published on Saturday explaining its decision to block the deal, SAMR said that Huya and Douyu’s combined market share in the video game live-streaming industry would be over 70 per cent if the merger went ahead, giving Tencent, the world’s biggest games publisher, a dominant role in gaming.

Beijing’s decision to block Tencent’s Douyu-Huya merger deal marks end of freewheeling internet era in China

A screengrab from Chinese live-streaming platform Douyu. Photo: Douyu

The merger plan had been many years in the making at Tencent. The Shenzhen-based internet giant is Huya’s biggest shareholder, with a 36.9 per cent stake, and also owns over a third of Douyu, with both firms listed in the US. Had the merger gone through, it would have given Tencent significant control over the video game streaming market, allowing the tech giant to control the video games ecosystem in China of development, publishing and promotion.

Henry Gao, a trade law professor at Singapore Management University, expects more mergers to be halted on similar antitrust grounds in future as China’s antitrust regulator meets instructions from the country’s leadership to “prevent the disorderly expansion of capital”.

“I expect the biggest platforms, the dominators in the market, to be worst hit by the latest enforcement drive,” he said.

A meeting earlier this year of the Politburo, China’s supreme policymaking body chaired by President Xi Jinping, concluded that China must rein in the expansion of capital as the ruling Chinese Communist Party looks to head off potential social unrest linked to the growing hold of Big Tech on the nation’s economy.

Huya and Douyu were once bitter rivals, filing a series of expensive lawsuits against each other as they went head to head over the past decade. Tencent, an early investor in both companies, had the opportunity to take over both platforms should it choose to. Last April, Tencent exercised an option to gain control of Huya after earlier seizing control of Douyu.

This allowed Tencent to propose a merger of the two companies with its own video game streaming arm Penguin Esports in October 2020.

The proposed deal seemed like a natural step, given that China’s tech industry had already seen its fair share of mega-mergers. In 2015, for example, Alibaba Group Holding-backed Meituan merged with Tencent-backed Dianping to create food delivery giant Meituan Dianping, valued at US$15 billion at the time. As of publication, Meituan has a market capitalisation of HK$1.78 trillion (US$229 billion).

Also in 2015, ride-hailing firms Didi Dache and Kuaidi Dache merged to create Didi Chuxing, with a valuation then estimated at roughly US$6 billion. Didi later took over Uber’s China operation in another headline-grabbing deal, which catapulted the company’s valuation to US$35 billion the following year. The market capitalisation of Didi, which recently listed in the US, now sits above US$60 billion.

You Yuting, senior partner at Shanghai Debund Law Firm, said the Huya-Douyu merger rejection could just be the beginning. “It remains to be seen whether the government will continue to hold Tencent accountable for various violations when it comes to the ‘concentration of business operators’,” said You.

SAMR dished out 22 fines of half a million yuan each to the country’s Big Tech firms last Wednesday, citing violations of ‘concentration of business operators’ with respect to a series of mergers and acquisitions deals closed in the last decade. The transgressions were not strong enough to necessitate the deals being unwound though.

The companies fined include Alibaba, which owns the South China Morning Post, Tencent and Didi. While a fine of 500,000 yuan (US$77,000) is relatively small change for the country’s Big Tech firms, it is the maximum amount allowed under China’s antitrust law for merger deal violations.

Analysts said the blocked merger may force Tencent to sell off its stake in one of the two streaming companies, given the risks of working with both due to ongoing antitrust regulation.

Mio Kato, research analyst at Lightstream Research, wrote on fintech platform Smartkarma that it would make sense for Tencent to divest its stake in Douyu, given Beijing’s scrutiny of its dominance in the gaming market.

“Given that Huya and Douyu are both likely to list in Hong Kong at some point, that could provide an opportunity for Tencent to sell its stake in Douyu,” he wrote.

News Related


Amazon introduces home robot alongside new Echo devices

Amazon has unveiled an autonomous home robot designed to guard the house as well as help with caregiving, as the firm announced a range of new smart home devices. Called ... Read more »

Best tablet for kids 2021: the top picks for children

The best tablet for kids isn’t like finding the best one for adults. Generally, a dedicated kids tablet from Amazon or Samsung is a better option for young children than ... Read more »

Boy, 14, missing from home in Cumbria found safe and well

A 14-year-old boy missing from home in Cumbria since Saturday has been found safe and well, the Guardian understands. Leven Sopwith-Nicholson had not been seen since Saturday night when he ... Read more »

Melania Trump started showing up on the arm of a 'handsome military aide' after the Stormy Daniels allegations broke, former aide says in book

First lady Melania Trump departs The Capitol at the conclusion of President Donald J. Trump‘s State of the Union Address on Capitol Hill January 30, 2018 in Washington, DC. Chris ... Read more »

The best iPhone 8 cases and iPhone 8 Plus cases: protect your all-glass iPhone

The iPhone 8 and iPhone 8 Plus are both well worth protecting, given that they have glass on both the front and back. That’s where this guide comes in, as ... Read more »

The best iPhone XR cases: our guide to protecting your phone

When the iPhone XR launched in 2018, its defining feature was that – despite a still quite hefty price – it was the ‘cheap’ iPhone. Since then, it has proved ... Read more »

3 astronauts move Soyuz to new space station dock ahead of film crew arrival

© Provided by Space The Soyuz MS-18 spacecraft during a relocation maneuver on Sept. 28, 2021. Three astronauts relocated a Russian Soyuz crew capsule to a new port on the ... Read more »

Best OnePlus phones of 2021: these are the top new or older OnePlus handsets

Our ranking of the best OnePlus phones has had a relatively recent and major update, as the OnePlus 9 and OnePlus 9 Pro have now launched and taken their places ... Read more »

Best phones for kids 2021: the top 10 phones designed for children

The best phones for kids aren’t like the best phones for adults. They’re more about having the bare essentials without overwhelming your child with options, compared to having the best ... Read more »

Dropbox is beginning to look more and more like a collaboration tool

The cloud storage provider Dropbox has announced three new products designed to make it easier for distributed teams to work together from anywhere. For many employees, working from home has ... Read more »

Apple Watch Black Friday deals 2021: what to expect this year

Black Friday Apple Watch deals are always popular, thanks to record-low prices on older models and first-time discounts on Apple’s latest releases. To help you score the best Black Friday ... Read more »

How to preorder Amazon's latest devices

Amazon announced a fleet of new products at its hardware event, including the Astro home robot, several Ring home security products, and other products like a bigger Echo Show 15 ... Read more »

Amazon launches its first wall-mounted speaker at unveiling event

© Provided by Daily Mail MailOnline logo Tech giant Amazon has launched its first ever wall-mounted speaker, at its streamed launch event on Tuesday. The £240 ($250) Alexa-powered Echo Show ... Read more »

Alexa Together turns your loved one's Echo into an emergency support device

Last year, Amazon announced Alexa Care Hub, a free service that uses Alexa to let people check in on family members. The so-called “caregiver” can see notifications and alerts when ... Read more »

How to sign up for an Amazon Astro invite

Amazon announced a home robot called Astro during its fall hardware event today, September 28th, which is designed to serve as a helpful mobile assistant that can navigate around the ... Read more »

Spruce Up Your Home and Yard This Fall With These 9 Cleaning Essentials

The sound of leaves crunching on the ground outside your home may seem tranquil, but the mess piles up quickly. Fortunately, there are plenty of tools and gadgets out there ... Read more »

Black Friday came early for LG's C1 OLED TV - down to a record-low price at Amazon

Grab one of the best TVs of 2021 at a stunningly low price, thanks to this incredible Black Friday-like deal that we’ve spotted at Amazon. Right now, you can get ... Read more »

Amazon Echo Show 15: everything we know about the wall-mounted Alexa device

Picture this: The brand new Amazon Echo Show 15 is a wall-hung smart screen that’s as much a picture frame as it is a connected gadget — and yes, you ... Read more »

Best Pixel phones: we've ranked all the Google Pixel handsets worth buying

Pixel phones are known for having top-tier cameras, a clean ‘stock’ Android operating system, and also getting new Android updates as early as possible. If these traits sound like something ... Read more »

Best Xiaomi phones of 2021: these are the top Mi, Redmi, Poco and Black Shark devices

This list of the best Xiaomi phones has been selected from the company’s wide array of smartphones – the tech giant has several sub-brands, all with multiple lines of phones, ... Read more »

Amazon's little robot named Astro will keep a watchful eye on your home - and you

Amazon’s new Astro robot. Amazon Amazon unveiled its home robot, named Astro, at its product event Tuesday. Astro comes equipped with cameras, microphones, and a screen, and keeps an eye ... Read more »

Over 87.6 crore Covid vaccine doses administered in India so far, says health ministry

The cumulative COVID-19 vaccine doses administered in the country has crossed 87.6 crore on Tuesday, the health ministry said. It said over 49 lakh vaccine doses were administered till 7 ... Read more »

Young children from England's poorest areas are shorter, study suggests

Young children from poorer areas in England tend to be shorter than their counterparts from richer areas, new research suggests. A new study found that primary school children from the ... Read more »

Best gaming phone 2021: the top 10 mobile game performers

The best gaming phones can rival tablets and arguably even portable consoles like the Nintendo Switch when it comes to gaming potential, so if you’re into games, then it’s worth ... Read more »

Batllefield 2042 beta download: How to install on Xbox consoles and PC

© Provided by Windows Central Everything you need to know about downloading the most ambitious Battlefield. If you’ve been looking for a new shooter to play, there’s good news: the ... Read more »

Cryptocurrency expert admits aiding North Korea

© AFP A cryptocurrency expert who gave a talk at a Pyongyang conference has admitted conspiring to help North Korea evade sanctions. Virgil Griffith, a former senior researcher with the ... Read more »

Microsoft Exchange introduces new security measures to prevent another 2021

Let’s exchange this year for another one. © Provided by Windows Central What you need to know Microsoft Exchange has had a very long 2021, between state-sponsored hack attacks and ... Read more »

The native Discord app is now discoverable through the new Microsoft Store

© Provided by Windows Central Another win for the new Microsoft Store as the most popular gaming social network is now available. What you need to know The official Discord ... Read more »

Forza Horizon 5 is more than just another racing game

© Provided by Windows Central No matter what kinds of games you enjoy, you’ll likely find something to love about Forza Horizon 5. One of the most anticipated games of ... Read more »

Amplitude valued at $5 billion after shares jump in Nasdaq debut

© Reuters/BRENDAN MCDERMID A screen announces Amplitude’s direct listing outside the Nasdaq Market in Times Square during in New York By Krystal Hu and Echo Wang (Reuters) -Shares of Amplitude ... Read more »

The Surface Laptop Studio may solve the worst Surface Book problems

© Provided by Windows Central For years I used Surface, but the Surface Book made me quit. I used to be a giant Surface fan, but in the past few ... Read more »

Amazon announces Astro the home robot

© Amazon Amazon is launching Astro, its first household robot, powered by its Alexa smart home technology. The company said it can be remote-controlled when not at home, to check ... Read more »

'Lego Star Wars Battles,' an exciting new strategy game, is out now on Apple Arcade

© Provided by Space Lego Star Wars Battles Exciting news for all Lego Star Wars fans: There’s a new mobile game called “Lego Star Wars Battles” available exclusively on Apple ... Read more »

Best Apple Watch: the ultimate guide to pick your iPhone compatible smartwatch

If you’re looking to buy the best Apple Watch, it’s very easy to assume that the newest automatically gets that trophy – however, you’d be wrong to make that assumption. ... Read more »

Best cheap smartwatch 2021: great budget devices for your wrist

Picking the best cheap smartwatch can feel confusing when there are so many options out there. It mostly depends on your budget and taste. The majority of them allow you ... Read more »

Xbox Cloud Gaming is now available for Xbox Insiders to test

Microsoft has revealed that Xbox Cloud Gaming is now available on the Xbox Insider Alpha and Skip-Ahead rings, which lets users stream Xbox Game Pass games via the cloud.  Revealed ... Read more »

Best Apple Watch screen protectors: our top picks and what to look out for

It’s definitely worth buying one of the best Apple Watch screen protectors to keep your beloved smartwatch from getting damaged, however with the market that’s saturated in many similar products, ... Read more »

Amazon's AZ2 CPU knows your face

The announcement of Amazon’s new wall-mounted Echo Show 15 also revealed its new CPU that comes with some interesting (or potentially scary) applications. The AZ2 chip builds on the machine ... Read more »

Amazon is adding offline voice recognition to Alexa devices

Amazon announced a slew of new Echo devices today, and with those came some new Alexa features that users will be able to take advantage of. The most interesting, by ... Read more »

Dell XPS 13 (2020)

© Provided by TechRadar An arctic white Dell XPS 13 (2020) on a coffee table Two minute review The XPS series has always been a fantastic line of laptops and ... Read more »