China to open antitrust inquiry into Didi-Uber deal

Didi Chuxing and Uber's $35bn merger is set to be investigated by Chinese antitrust regulators over whether the deal complies with competition legislation in the country.

Uber agreed to the sale of its Chinese unit in July after a long and costly war of competition between the two companies. Didi will acquire Uber's operations, with investors of the US company receiving a 20% stake.

A debate has emerged regarding the regulation of such internet businesses, and China became the biggest marketplace to formally legalise the sector last month.

The Ministry of Commerce is leading the investigation, following on from "complaints" surrounding the legality of the deal, and whether it would create a monopoly in the market.

Information has been requested by the ministry from both companies, in order to "understand the online ride-hailing business model and the sector’s competitive environment," said spokesman Shen Danyang.

Most industry experts do not see the investigation causing any significant disruption to the deal, apart from a short time delay.

The move, however, does seem to be an attempt by the Chinese authorities to maintain a tough stance against companies that do not seek prior approval ahead of such transactions. Both companies have remarked that they have not crossed the turnover thresholds required for such a notification.

Didi is rated as one of the world's most valuable startups with an estimated worth of $28bn, bigger than the likes of AirBnB and Snapchat.