China News Service, July 10th. According to the website of the State Administration for Market Regulation, on January 4, 2021, the State Administration for Market Regulation filed for Tencent Holdings Co., Ltd. (hereinafter referred to as Tencent) to Huya Company (hereinafter referred to as Huya) and Douyu International Holdings In the case of the merger of a limited company (hereinafter referred to as Douyu), an anti-monopoly review of the concentration of undertakings shall be conducted according to law.
According to the Anti-Monopoly Law, the State Administration of Market Supervision comprehensively analyzes and evaluates the market shares of the operators participating in the concentration and their control over the market, the degree of market concentration, the impact of concentration on market entry and technological progress, and the concentration on consumers And other factors such as the influence of relevant operators, and the effectiveness of Tencent’s additional restrictive commitment plan.
During the review process, the State Administration for Market Regulation extensively solicited opinions from relevant government departments, industry associations, experts and scholars, competitors in the industry, and downstream customers, and listened to Tencent's opinions on many occasions.
The review shows that the relevant markets in this case are the online game operation service market and the game live broadcast market in China.
Tencent's upstream online game operation service market share exceeds 40%, ranking first; Huya and Douyu's downstream game live broadcast market shares exceed 40% and 30%, respectively, ranking first and second, totaling more than 70%.
Currently, Tencent has sole control over Huya and joint control over Douyu.
For example, the merger of Huya and Douyu will allow Tencent to independently control the combined entity, further strengthen Tencent’s dominant position in the game live broadcast market, and at the same time give Tencent the ability and motivation to implement closed-loop management and two-way vertical blockade in the upstream and downstream markets. Eliminating and restricting the effects of competition is not conducive to fair competition in the market, may reduce the interests of consumers, and is also not conducive to the healthy and sustainable development of the online game and game live broadcast market.
After evaluation, Tencent’s proposed additional restrictive conditional commitment program cannot effectively address the aforementioned competition concerns.
According to Article 28 of the Anti-Monopoly Law and Article 35 of the Interim Provisions on the Review of Concentration of Undertakings, the State Administration for Market Regulation has decided to prohibit this concentration of undertakings in accordance with the law.