The Chinese regulator SAMR (State Administration of Market Regulation) is apparently planning on giving the green light to Tencent regarding its multi billion Dollar deal. But, the company will have to set p a special mechanism to ensure data security, as per people close to the matter.
According to a Reuters report, the regulator has no objection to the 3.5 billion US Dollar deal for the Chinese tech giant to acquire 60 percent of Sogou. The company would also be required to pay a relatively small fee of 500,000 Yuan (roughly 76,000 US Dollars) for not reporting deals properly to the appropriate authorities for an anti trust review, as per two of the sources. Notably, the news arrives weeks after we had reported on Tencent agreeing to certain conditions for its Chinese streaming platform merger deal.
The move from the Chinese regulators also signifies the government’s attempts to tighten regulations around the local tech giants, especially involving their acquisition deals and mergers. Furthermore, the approval of the deal would also arrive as a relief to other tech firms in the region that have been closely following the development of the situation. This is also likely a part of Beijing’s efforts to crack down on the growing monopoly of internet giants.
One source familiar to the matter added that “What SAMR wants is enforcement … it is not in their interest to kill or actively block a deal. They are fine with companies’ actual market-leading status as long as it doesn’t prevent new entry into the market.” At the moment, Sogou is a major player in the local market and only trails behind other giants like Baidu and Qihoo 360. So stay tuned for more updates regarding this matter.
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