(Bloomberg) — China’s antitrust watchdog has launched an investigation into online property giant KE Holdings Inc., widening a crackdown into the country’s tech sector, Reuters reported, citing people with knowledge of the matter.
The State Administration for Market Regulation began a formal probe into whether KE forces developers to list housing information exclusively on its platforms including Lianjia and Beike, according to Reuters. The tactic — known as “pick one from two” — was among violations that led to a record $2.8 billion fine for Alibaba Group Holding Ltd. in April, while Meituan is also being investigated for similar charges.
In a brief statement posted to Wechat, KE called reports that it was under probe “fake news.” Reuters said SAMR didn’t respond to a request for comment. Since late April, the regulator has stationed inspectors in 17 so-called platform companies including KE to boost the efficiency of antitrust inspections, Reuters cited one person as saying.
News of the probe may add to uncertainties for KE, backed by some of Asia’s most influential startup investors including Hillhouse Capital, Tencent Holdings Ltd., and SoftBank Group Corp. The company announced last week its billionaire founder Zuo Hui died of an unspecified illness, a shocking development for a firm that pulled off one of the strongest U.S. market debuts of 2020. KE shares have retreated 15% this year, though it’s still up 160% since its listing.
Read more: Billionaire Founder of China Property Giant Dies of Illness
KE is only the latest tech giant to become ensnared in Beijing’s antitrust campaign. After scuppering fintech giant Ant Group Co.’s initial public offering and launching a probe into Alibaba last year, regulators have since introduced new rules governing competition, fintech and data collection. Regulators in April imposed the fine on Alibaba, driving the e-commerce giant to its first loss in nine years, and ordered its 34 largest tech firms including KE’s Beike to pledge compliance with regulations.
In one of his last public appearances, Zuo acknowledged accusations of unfair pricing during the early days of Beijing Lianjia Real Estate Brokerage Co., which he founded in 2001. “We’ve done a lot of bad stuff too,” he told state-run CCTV in an interview that aired in April, adding that the company later changed its business practices after recognizing they were a problem.
Beike uses artificial intelligence and big data to improve its service and provide market insights, according to its website. As of June, the company boasted 226 million homes on its platform and 39 million monthly active users on mobiles. That’s swelled to more than 48 million mobile monthly active users and half a million agents.
The platform also draws in others by allowing decorators, renovators and financial institutions to connect with buyers, creating an ecosystem of property and related offerings.
(Updates with statement from KE in third paragraph)
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