China’s market regulator is investigating Didi on whether it violated antitrust rules, Reuters reported Wednesday night. Didi called the report “unsubstantiated speculation.”
Why it matters: The probe report comes less than a week after the ride-hailing giant filed for a US IPO on Thursday. It remains to be seen whether the news will affect the company’s plan to go public.
A slew of tech major Chinese companies have faced antitrust scrutiny in the last year as part of a broad push to regulate the country’s powerful tech sector.
Check out TechNode’s Techlash Tracker for an overview of the crackdown.
Details: Unnamed sources told Reuters that China’s market regulator, the State Administration for Market Regulation (SAMR), is looking at Didi on suspicion of anti-competitive practices.
Regulators are also investigating whether Didi used anti-competitive practices to squeeze out smaller rivals, and whether Didi manipulated the price of rides, Reuters wrote.
The probe is in early stages, and the regulator has not yet given detailed instructions to Didi, according to Reuters’ report.
A Didi spokesperson told TechNode on Friday that it refused to comment on “unsubstantiated speculation from Reuters’ unnamed sources.”
Context: Didi, dominant in China’s ride-hailing market, has been fined several times this year by market regulators for antitrust violations.
In March and April, SAMR fined Didi’s subsidiaries a combined RMB 2 million (around $310,000) for insufficiently disclosing past acquisitions and investments for antitrust reviews.
Didi was punished in April alongside several other Chinese tech giants, including Tencent and Meituan, for failing to seek antitrust clearance for their investments.
Didi has dominated the ride-hailing market since merging with Alibaba-backed Kuaidi in 2015. A year later, Didi bought out Uber’s China business as the American rival left the market.