Beijing opens antitrust investigation into Didi’s proposed takeover of Uber’s China unit
If regulators find the takeover in violation of antitrust laws, they can order to unwind the deal
China’s commerce ministry said it’s investigating whether Didi-Chuxing Technology’s proposed takeover of Uber’s China business violates the country’s antitrust regulations.
The ministry will review the deal to protect fair market competition, as well as uphold consumer rights and public interest, the commerce ministry’s spokesman Shen Danyang said during a Friday press conference in Beijing.
If regulators find the deal to have violated antitrust regulations, they could force the companies to unwind the takeover, and face a fine of no more than 500,000 yuan, said Beijing Zhongwen Law Firm’s lawyer Wu Fei, citing the country’s laws.
“The worst situation is that the two car-hailing firms will go back to operate their own businesses individually if they are found to be in violation of China’s antitrust laws, and each pay a fine,” said Wu.
Didi’s August 1 proposal to acquire Uber’s China business would create the country’s biggest car-hailing service, with 1.35 million drivers operating in 360 of Chinese cities and towns. The combined business is valued at US$35 billion, according to a report by Caixin magazine, citing a person familiar with the deal.
As of August 1 when the takeover was announced, the commerce ministry had not received Didi’s application for approval to combine, Shen said.
Chinese antitrust regulators talked twice with Didi’s management, requesting information on the transaction and reasons why the company hadn’t applied for approval. They also asked Didi to submit relevant documentation to support the case, Shen said.