You are here: Home » International » News » Companies
Business Standard

Regulators launch antitrust probe into China's biggest property broker

China's market regulator has begun an investigation into suspected anti-competitive practices by KE Holdings, the country's biggest housing broker whose top backer is Tencent Holdings

Topics
antitrust law | China

Reuters  |  BEIJING 

China

BEIJING (Reuters) -China's market regulator has begun an investigation into suspected anti-competitive practices by KE Holdings, the country's biggest housing broker whose top backer is Tencent Holdings, two people who know of the matter said.

The investigation is the latest into China's big so-called "platform" that match sellers and buyers, several of which have been accused by regulators of exploiting consumers.

KE Holdings, which operates housing platforms Lianjia and Beike in China, was warned last month by the State Administration for Market Regulation (SAMR), along with dozens of internet companies, against any abuse of market dominance and told to conduct self-inspections.

SAMR has been formally investigating in recent weeks whether KE Holdings forces real estate developers to list housing information only on its platforms, including Lianjia and Beike, a tactic known as "choose one from two", the people said, declining to be named because the information is not public.

The investigation has not been publicly announced. It is not known when it will wrapped up or what it could entail for KE Holdings.

KE Holdings declined to comment. SAMR didn't immediately respond to a request for comment.

KE's New York-listed shares fell as much as nearly 10% in pre-market trading on Tuesday, after the Reuters report.

Last month, SAMR hit Alibaba Group with a record $2.8 billion fine after finding that the e-commerce giant had been preventing its merchants from using other online e-commerce platforms since 2015.

Tencent itself is in the firing line, with SAMR preparing to levy a fine of at least $1.5 billion on the gaming and social media behemoth, Reuters reported in April. SAMR also announced an investigation last month into Tencent-backed food delivery giant Meituan.

SAMR has stationed inspectors since late April in 17 that operate platforms, including KE Holdings, to enhance the efficiency of antitrust inspections, one of the sources said.

KE Holdings, which also counts SoftBank Group Corp among its major backers, launched Lianjia, formerly known as Beijing Homelink Real Estate Brokerage, 20 years ago.

It grew into one of China's largest bricks-and-mortar property agents and later set up Beike as a separate online housing platform matching buyers and sellers, renters and landlords, as well as providing home finance.

It listed in New York in August, and after sharp gains last year the shares are down 15% so far in 2021. Still, it has a market value of about $62 billion.

On top of the antitrust probe, KE Holdings faces uncertainty following the death last week of its 50-year-old founder and chairman, Zuo Hui, due to an illness. Co-founder Peng Yongdong was appointed chairman this week.

Its biggest revenue sources are from existing home and new home transactions, with market shares of 26% and 35%, respectively, of gross transaction volume in 2020, according to TF Securities, a relatively high proportion in China's fragmented housing market. KE Holdings posted stellar first quarter financial results last week, with net revenue up 191% on the year, bolstered byChina's robust property market that quickly rebounded last yearfrom the coronavirus crisis.

(Reporting by Yingzhi Yang, Cheng Leng and Tony Munroe in Beijing; Editing by Muralikumar Anantharaman)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, May 25 2021. 14:40 IST
RECOMMENDED FOR YOU
.