The spark of "anti-monopoly" continues to spread in the Internet field, this time a joint venture between Minmetals Development and BABA.

On the evening of April 19th, the listed company Minmetals Development announced that the company had recently received a case investigation letter issued by the State Administration of Market Supervision and Administration (hereinafter referred to as "the General Administration of Market Supervision and Administration"), because "the transaction is suspected to constitute an illegal implementation of operator concentration." it will file a case for investigation against the joint venture steel vertical e-commerce company set up with BABA.

It should be noted that, including BABA, Tencent, Baidu, Inc., Meituan, Toutiao and so on, more and more Internet giants begin to get involved in the anti-monopoly storm. With the anti-monopoly wave further sweeping the Internet field, not only the regulatory authorities' anti-monopoly review and enforcement of enterprises will become more stringent, but also more Internet companies will use this as a spear to try to charge the moat of their competitors.

There is another antitrust investigation.

According to the announcement, the General Administration of Market Supervision recently issued a notice for investigation of suspected illegal implementation of operator concentration on Minmetals Development. Because Minmetals Development and BABA Group holding Co., Ltd. set up a joint venture-Minmetals Electronic Commerce Co., Ltd. (now renamed as "Longteng Technology Co., Ltd.", referred to as "Longteng Digital Technology Co., Ltd.") is suspected of constituting an illegal implementation of operator concentration. Therefore, it was decided to file a case for investigation.

According to Minmetals Development, in May 2012, the company established a wholly owned subsidiary Minmetals Electronic Commerce Co., Ltd. (referred to as "Minmetals e-commerce"). In November 2015, Hangzhou BABA Venture Capital Co., Ltd. (referred to as "BABA Venture Capital") increased its stake in Minmetals e-commerce. After the increase, Minmetals e-commerce is a joint venture jointly funded by Minmetals Development, BABA Venture Capital and Beijing Haili Yunzhi Investment Management Center (limited partnership). The shareholding ratios of all parties are 46%, 44% and 10% respectively. In December 2019, BABA Venture Capital transferred its 44 per cent stake in Minmetals ecommerce to Yi Da (Beijing) supply chain Management Co., Ltd.

Tianyanchan APP data also show that in November 2015, BABA conducted a round of financing for Minmetals e-commerce with a capital of 590 million yuan. Based on a 44 per cent shareholding ratio, Minmetals e-commerce was valued at 1.341 billion yuan at that time.

Minmetals Development also said that in accordance with the requirements of the "notice of filing an investigation", the company will actively cooperate with the investigation work of the General Administration of Market Supervision, and strictly fulfill the obligation of information disclosure in accordance with the relevant requirements to remind investors to pay attention to investment risks.

Market data show that as of February 26, 2021, Minmetals Development shareholders have a total of 59501 households, each holding about 18000 shares. According to the closing price of 8.25 yuan on April 19th, it is equivalent to 148600 yuan per household holding the development market value of Minmetals. By the end of 2020, institutions held a total of about 690 million shares of Minmetals Development, of which 686 million shares were held by general legal persons, 3.1826 million shares by brokers and 235100 shares by funds.

What are the magical powers of the e-commerce involved?

According to APP data, Longteng, which is under investigation, has two e-commerce platforms, one is Xin Yilian, an e-commerce platform for spot trading of iron and steel commodities, and the other is an iron and steel e-commerce platform called "five Brothers".

It is reported that "Wu GE", also known as "Minmetals BABA Steel platform", is a B2B vertical steel e-commerce platform jointly created by Minmetals Development of China Minmetals Group and BABA Venture Capital of BABA Group. BABA mainly provides online technology and big data resources, while Minmetals mainly provides offline resources such as warehousing.

"five elder brother" CEO Miao Feng once told the media to insist on being a third-party platform for integrating the industrial chain. It is reported that the platform includes two major businesses, which aims to effectively solve the problems of steel mining and steel purchase by the vast number of small and medium-sized micro-manufacturing enterprises:

One is "Gangbao", which provides supply chain services such as intelligent, efficient, accurate and safe demand matching, risk protection, transaction settlement and financial logistics to terminal buyers.

Second, "selling treasures on credit", through effective cooperation with insurance companies and banks, to provide buyers with increased credit, for sellers with accounts receivable, guarantee insurance services and capital borrowing services.

Previously, in July 2019, "five Brothers" announced that since its establishment in March 2016, 10000 merchants had settled on the platform, with a cumulative development of more than 350000 members. According to the calculation of a steel market accommodating 500 merchants, 10,000 sellers opening stores is equivalent to opening 20 offline steel markets.

According to its official website, also in 2019, "five Brothers" was successively selected as the "Internet leader in China's iron and steel industry in 2018" and "China's top 100 commodity e-commerce enterprises in 2019". It has been identified as a high-tech enterprise by the Beijing Municipal Commission of Science and Technology, the Beijing Municipal Bureau of Finance and the Beijing Administration of Taxation.

The Internet is still the focus of antitrust

Since the beginning of last year, the General Administration of Market Supervision released the "revised draft (draft for public consultation)" to solicit opinions from the public, taking into account the determination of the dominant market position of operators in the Internet field for the first time. The "spark" of anti-monopoly in the Internet field quietly spread, and began to form a trend of thunder in 2021.

The most impressive thing is that on April 10, the General Administration of Market Supervision imposed administrative penalties on BABA for "monopolizing one of the two" in China's online retail platform service market and ordered him to stop the illegal behavior. and imposed a huge fine of 18.228 billion yuan on the basis of 4% of its sales in 2019.

The General Administration of Market Supervision pointed out that since 2015, BABA has abused the dominant position in the market and put forward a requirement of "choosing one of the two" to the merchants on the platform, forbidding them from opening stores or participating in promotional activities on other competitive platforms. and with the help of market forces, platform rules, data, algorithms and other technical means, take a variety of reward and punishment measures to ensure the implementation of "one of two" requirements to maintain and enhance their own market power. Gain unfair competitive advantage.

BABA also said in a public response that he "sincerely accepts and resolutely obeys" the punishment, and that he will strengthen management in accordance with the law, further strengthen the construction of the compliance system, be based on innovation and development, and better fulfill his social responsibility.

Similarly, on March 12, the General Administration of Market Supervision issued a notice saying that 12 Chinese Internet technology companies, including Tencent, Baidu, Inc. and related parties controlled by BABA, Meituan, JD.com, SUNING and DiDi Global Inc., were fined 500000 yuan respectively.

It is reported that the penalty information disclosed this time involves 10 equity investment transactions participated by the above-mentioned companies, which do not constitute a monopoly result of excluding or restricting competition, but they all constitute an illegal law because they do not declare the transactions in accordance with the law.

In addition, it is particularly noteworthy that now some Internet companies have also begun to use "antitrust" as a weapon to launch an offensive against competitors.

Douyin formally filed a complaint with the Beijing intellectual property Court on February 2, suing Tencent for restricting users from sharing content from Douyin through Wechat and QQ, which constitutes a "monopolistic act of abusing market dominance and excluding and restricting competition" prohibited by the Anti-monopoly Law. And with this request the court ordered Tencent to stop this behavior immediately, and compensate Douyin for economic losses and reasonable fees of 90 million yuan.

On April 10, Yao Jinbo, founder of 58.com, also called on the state antitrust fine KE Holdings Inc. 4 billion yuan (4% standard), and suggested that the money be credited to the national provident fund account to reduce the provident fund loan interest rate to ease the burden of ordinary people buying houses. Yao Jinbo also said that 58 Anjuke will enter the new housing field as a challenger this year.