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Didi Chuxing's Uber acquisition raises Chinese antitrust concerns

When you already control most of the ridesharing in a country, buying up your biggest competitor might be an issue.

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BEIJING, CHINA - 2016/08/02: Apps of Uber and Didi Chuxing on smart phone. Uber is selling its operation in China to its chief rival, Didi Chuxing, in exchange for a 20 percent stake. The deal is waiting for the government's approval. From Nov.1, 2016, ride-hailing services will be legitimate in China, but those offering rides below cost are prohibited. (Photo by Zhang Peng/LightRocket via Getty Images)
Zhang Peng, LightRocket via Getty Images

Uber wasn't exactly making the waves it had hoped to in China, so it was likely a welcome respite when Didi Chuxing, the king of Chinese ridesharing, decided to buy Uber's Chinese assets. But while creating a $35 billion titan sounds great for Didi itself, the Middle Kingdom's antitrust alarms started ringing.

China's commerce ministry is currently investigating whether or not Didi's acquisition will be considered a monopoly, Reuters reports. Didi claims an 87 percent share in the ridesharing market, which is pretty high for any industry. The two companies did not request merging approval through the commerce ministry, because Didi believed it did not meet the financial threshold required for filing.

Regulators aren't just going to let this merger slip through the cracks, though. They've already talked to Didi twice about the merger, as the government wants to ensure a chance for competitors to enter the market and confirm the notion that consumers will benefit from this merger. Neither company immediately returned a request for comment.

Apple recently invested $1 billion in Didi Chuxing, as it sends out probes ahead of its own car-industry reveal. Nobody's really sure what Apple has planned. Most folks think it's a car, while some of us at Roadshow think its aspirations lie closer to a ridesharing system.

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