China launches antitrust probe into Tencent-backed property broker KE: sources

Beijing

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

Last month, SAMR hit Alibaba Group with a record US$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 US$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 companies that operate platforms, including KE Holdings, to enhance the efficiency of antitrust inspections, a source said.

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

Its biggest revenue sources are from existing home and new home transactions, with market shares of 26 per cent and 35 per cent, respectively, of gross transaction volume in 2020, said TF Securities, a relatively high proportion in China's fragmented housing market. REUTERS