Firing a fresh salvo, Chinese regulators imposed fines on domestic tech stalwarts, which are yet to recover fully from an earlier clampdown that led to billions being wiped off their market capitalizations.

What Happened

Alibaba Group Holding Limited (BABA), Tencent Holdings Limited (TCEHY), and Baidu, Inc. (BIDU) were among companies ordered to pay 500,000 yuan ($78,282) for each of the 43 M&A transactions that were not reported by these companies over the past eight years, reports said, citing filings by the State Administration for Market Regulation.

The other companies included in the recent regulatory crackdown are JD.com, Inc. (JD) and Suning Ltd. These companies will have to cumulatively shell out $3.4 billion for "failing to declare illegal implementation of operating concentration."

Why It's Important

Not too pleased with the way these tech conglomerates are conducting their businesses, in violation of antitrust regulations, China began wielding the regulatory whip late last year.

Alibaba became the first target after its famous founder Jack Ma accused the government of overregulating the tech sector. Regulators were quick to act, ordering Alibaba to pay a hefty fine of $2.87 billion for engaging in alleged anti-competitive practices. The penalty also forced the company's Ant Financial unit to shelve its ambitious IPO plans.

The crackdown widened to other tech stocks in early 2021, and later to for-profit education companies. The latest round comes just when it looked like the crackdown had passed, and is likely to trigger concerns of further impact on these high-flying companies.

A host of factors, including regulatory woes, led to Alibaba reporting last week its first adjusted profit decline in more than five years for its September quarter.