China’s market regulator is investigating Didi on whether it violated antitrust rules, Reuters reported Wednesday night. Didi called the report “unsubstantiated speculation.”

Why it matters: The probe report comes less than a week after the ride-hailing giant filed for a US IPO on Thursday. It remains to be seen whether the news will affect the company’s plan to go public. 

  • A slew of tech major Chinese companies have faced antitrust scrutiny in the last year as part of a broad push to regulate the country’s powerful tech sector. 

READ MORE: The Chinese gaming startup outperforming Tencent overseas

Details: Unnamed sources told Reuters that China’s market regulator, the State Administration for Market Regulation (SAMR), is looking at Didi on suspicion of anti-competitive practices. 

  • Regulators are also investigating whether Didi used anti-competitive practices to squeeze out smaller rivals, and whether Didi manipulated the price of rides, Reuters wrote. 
  • The probe is in early stages, and the regulator has not yet given detailed instructions to Didi, according to Reuters’ report.
  • A Didi spokesperson told TechNode on Friday that it refused to comment on “unsubstantiated speculation from Reuters’ unnamed sources.”

Context: Didi, dominant in China’s ride-hailing market, has been fined several times this year by market regulators for antitrust violations. 

  • In March and April, SAMR fined Didi’s subsidiaries a combined RMB 2 million (around $310,000) for insufficiently disclosing past acquisitions and investments for antitrust reviews. 
  • Didi was punished in April alongside several other Chinese tech giants, including Tencent and Meituan, for failing to seek antitrust clearance for their investments.
  • Didi has dominated the ride-hailing market since merging with Alibaba-backed Kuaidi in 2015. A year later, Didi bought out Uber’s China business as the American rival left the market. 

Jill Shen

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen