China Steps Up Antitrust Pressure on Internet Firms

Chinese regulators have intensified scrutiny of dozens of domestic internet companies for possible antitrust violations. Agents from government agencies including the antitrust watchdog, the cyber police, and tax authorities have paid surprise visits to some companies. During these on-site inspections, agents have questioned senior executives, downloaded contracts and financial records, and collected emails and internal communications. The actions are the latest examples of how Beijing is intensifying regulatory scrutiny of China’s technology sector and underscore how the clampdown is impacting a broad swath of companies. While regulatory reviews do not necessarily mean the companies would face punishment, they come at a particularly sensitive time for companies planning to go public and could potentially affect or even cancel their plans. Yet some executives and investors are saying these inquiries could be more helpful than troublesome to companies, because it gives them a chance to fix their problems before the companies become the target of more serious official investigations by government watchdog agencies.