Written by By Staff Writer, CNN
Sidelined from Tencent’s $12 billion deal to buy Snap — the company behind the ephemeral messaging app Snapchat — Chinese tech giant Alibaba could now find itself feeling remorseful over its ties to online gaming firm Magic Pony.
The inter-company exchange was at the center of new charges by antitrust authorities against four of China’s largest internet companies, Bloomberg reported. In a statement cited by the news agency, China’s Commerce Ministry said the suspected violations of competition rules included monopoly power, market abuse and unfair pricing.
Alibaba, Tencent, Baidu and Silicon Valley biotech firm Gilead Sciences all dismissed the charges in statements to Bloomberg.
More than a year ago, Tencent agreed to pay up to $12 billion to buy Snapchat’s parent company, Snap, after battling a takeover bid from Google in 2011. The Chinese tech firm subsequently moved to buy about 39% of Magic Pony, where Tencent co-founder Pony Ma is chairman, and invested in Magic Pony staff share schemes.
These tactics, the Office of the State Administration for Industry and Commerce (ASIC) said, are “unreasonably giving a competitive advantage to the Chinese shareholders of those companies, while impeding the growth of competing firms.”
“These actions have harmed the interests of other competition and consumers, and violated the provisions of the provisions on mergers and acquisitions,” the trade body said in a statement to Hong Kong-listed Tencent.
In late February, Alibaba said it had acquired a stake in Magic Pony.
Magic Pony generated more than $200 million in sales in 2017 and it’s believed the company is working on developing an artificial intelligence-based platform for producing and displaying 3D holographic images.