Didi Chuxing’s acquisition of Uber’s China business is facing fresh scrutiny from one of China’s antitrust regulators in an unexpected turn.
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The ministry said that it will carry out the probe under China’s antimonopoly law and other legal statutes governing financial transactions.
China is now the biggest ride-hailing market in the world, and Didi Chuxing boasts of a 90 percent share of the massive and lucrative market.
The commerce ministry’s antitrust unit has already held two meetings with Didi and requested information on the deal as well as the reason the company didn’t apply for antitrust review, a ministry spokesman said at a press conference Friday, according to a transcript on its website.
The company has been asked to submit a list of documents and other materials to the ministry.
In a statement, Didi founder and Chief executive officer Cheng Wei said, “Did’s success today would not be possible without the support from our early taxi partners and millions of taxi drivers at the beginning”.
A Didi spokesperson said the company is “in communication with the authorities”.
A representative for Uber could not be reached immediately for comment.
Uber launched in China in 2013, and its operations have since expanded to roughly 60 cities.
But China was a tough market to crack – especially in the face of stiff opposition from Didi. That would make Uber’s share worth United States dollars 7 billion.
Both companies burned through investment funds by subsidizing drivers and prices in an effort to capture more of the market.
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The move shows that local government-backed taxi operators, which once saw private ride-sharing apps as a big threat to their business, have given up the fight against Didi when it became the largest ride-hailing company in China with over a 90 per cent market share after being legalised by the central government and merging with Uber China in July.
