China’s biggest third-party payment providers, Alipay and WeChat Pay, could face antitrust investigations and forced divestiture under proposed new rules that tighten oversight of nonbank institutions in the sector, reported Caixin.
The government and regulators will gain new powers to fight monopolies and abuse of market power by dominant players if draft rules published Wednesday by the People’s Bank of China (PBOC) governing nonbank payment services providers are approved. The draft is open for public feedback until Feb. 19.
The rules are designed to “diversify regulatory measures with a focus on strengthening financial regulation and preventing systemic financial risks,” the central bank said in a statement accompanying the draft. They also “strengthen anti-monopoly measures in the payments field, clearly define the scope of the market and the standards for determining market dominance, and maintain fair competition and market order.”
The proposed regulations are the latest step in the government’s campaign to defuse financial risks and crack down on anti-competitive practices by powerful fintech and internet giants that intensified in the fourth quarter of 2020 when the authorities ordered the suspension Ant Group’s blockbuster IPO, said Caixin.