State-owned bank China Citic Bank has become one of the first companies outside of the internet sector to be fined amid China’s crackdown on anticompetitive behavior, reports Caixin. Internet company Baidu has also been fined as part of the continuing antitrust action. Almost five years after getting the banking regulator’s approval to set up an online bank with Baidu, China Citic Bank was fined for not notifying antimonopoly regulators of the State Council, China’s cabinet, before establishing the joint venture.
State-owned Citic and Chinese search engine giant Baidu were each fined RMB 500,000 ($78,301) for the violation, one of the 43 antitrust violations announced on Saturday by the State Administration for Market Regulation (SAMR). Citic and Baidu set up the online lender Citic Aibank, the nation’s first direct bank with separate legal personality, in September 2017, with Citic holding a 70% stake and Baidu 30%. Direct banks have no brick-and-mortar branches and only offer services online or via telephone.
The dozens of violations announced by SAMR involved acquisition and joint venture deals in the past, with some deals going back as far as a decade. The deals violated Article 21 of China’s Anti-Monopoly Law, which urges companies to report to State Council antitrust watchdogs if they reach a certain concentration in the market—usually measured by revenue.
