Didi, the IPO-bound Chinese ride-hailing giant, reportedly faces antitrust probe

June 18, 2021 0:19 am

Chinese ride-hailing giant Didi Chuxing is undergoing antitrust investigations by the market regulator, Reuters reported, citing people familiar with the matter.

Details: China’s top market regulator, the State Administration for Market Regulation (SAMR), is investigating whether Didi used any competitive practices that squeezed out smaller rivals unfairly, said the report.

The regulator is also examining whether the pricing mechanism used by Didi’s core ride-hailing business is transparent enough.

Two of the sources familiar with the situation said that the probe by the markets regulator was in the initial stages and that the regulator was yet to give the company detailed instructions.

“We do not comment on unsubstantiated speculation from unnamed sources,” Didi said in an emailed statement.

Context: The probe is the latest in a sweeping crackdown on China’s so-called “platform” companies, including Alibaba Group and Tencent.

In March, SAMR fined the registered firm behind Didi’s community group-buying platform Chengxin Youxuan 1.5 million yuan ($233,656) along with another four firms, citing “improper pricing behavior.”

In its IPO prospectus submitted to the US Securities and Exchange Commission last week, Didi disclosed that it and more than 30 other Chinese internet companies had met with regulators, including the SAMR, in April. 

The regulators require these companies to conduct "self-inspections", and submit compliance commitments. Behaviors that may violate relevant laws and regulations such as anti-monopoly, anti-unfair competition, taxation, etc., need to be identified and corrected, Didi said in the documents, adding that it has completed its self-inspection and "relevant government departments have conducted on-site inspections."