Two Years Later, DiDi is Under Anti-Trust Investigation, Again
DiDi used to say the anti-trust review was unnecessary due to the union's annual earning was less than China's anti-trust law's threshold of CNY10 billion (USD 1.5billion).
On Nov 16, 2018, WU Zhenguo（吴振国）, head of the Anti-Monopoly Bureau of the State Administration for Market Regulation（国家市场监督管理总局）, claimed that authority is now investigating Uber-DiDi merger case.
According to WU, ride-hailing is an emerging industry in China and overseas, the authorities will assert their responsibilities and protect the market order as doing research on competition rule in the internet industry. They will protect public common interest and legal rights of customers under the antitrust law. Authorities will establish regulation systems towards internet industry and move it to a competition-driven market-oriented economy to stimulate innovation as well.
The Commerce Ministry started its investigation in September 2016 , one month after the USD 35 billion merger was announced. No result has been provided since then. The union of DiDi and Uber China would control 80% of the market according to The Commerce Ministry. In 2017, DiDi had nearly 69 million users monthly while Yidao Yongche was just over two million, reported by Wired.
DiDi used to say the anti-trust review was unnecessary due to the union's annual earning was less than China's anti-trust law's threshold of CNY10 billion (USD 1.5billion), while according to an anti-monopoly lawyer, that they burned away any cash they made (see more in this article). Their revenue ought to be higher than the total amount generated from customers and plus the big subsidies they offered, reported by Caixin.
However, just as WU mentioned, DiDi is in an emerging industry. The point is how you define where DiDi was, if its mobility, then DiDi surely is a monopoly, but if its digital service, things can be equivocal. DiDi is exposed to competitive pressure again, which means Baidu, Alibaba or Tencent (BAT) could easily enter the market.
——Author: LinYan.Write to LinYan at LinYan@EqualOcean.com