China’s State Administration for Market Regulation (SAMR) slapped China National Knowledge Infrastructure (CKNI) with a $12.6 million (87.6 million yuan) fine for abusing its dominant market position.
According to the South China Morning Post, the fine is equivalent to 5% of CKNI’s $251 million (1.75 billion yuan) generated last year.
The move came after the regulators started an investigation in May on the private firm’s suspected monopolistic practices.
CKNI is China’s leading academic research platform for Chinese scholars and students to find academic papers.
SCMP noted that the company was established by Tsinghua Tongfang, a commercial unit of one of the most reputable schools in the nation – Tsinghua University.
CKNI started constructing its database back in the late 1990s. Due to the advantages of being a state-backed project and having connections with leading academic institutions, it has grown to dominate the market by storing more than 95% of the country’s academic papers.
In 2021, CKNI made up almost 70% of the total market revenue.
However, over the last few years, CKNI became a public focus following accusations of abusing its monopolistic position by Chinese scholars and academics.
SAMR’s probe disclosed that the firm has continued to increase its annual academic database fees by more than 10% every year since it became a private enterprise in 2014. For some customers, CKNI charged even over 30%.
In addition, the platform also charged clients looking to buy academic papers an additional 1.5% on sale price each year.
In response to the penalty, Sixth Tone reported that CKNI vowed to support the private partnership, reduce subscription fees by a third over the next three years, and upgrade the payroll system for copyright owners.
Regarding China’s antitrust crackdown, SAMR already imposed a massive fine of $2.6 billion (18.2 billion yuan) on Jack Ma’s Alibaba and $493 million (3.44 billion yuan) on food delivery giant Meituan last year.
In 2020, CNN reported Tencent planned to make a merger deal that was valued at nearly $6 billion at the time by combining Penguin Esports with two other leading game streaming platforms in China, Huya and Douyu.
But the deal was blocked by the Chinese anti-monopoly regulator to prevent Tencent from gaining too much market power and becoming dominant in the video game streaming market.