BEIJING (BLOOMBERG) - China's antitrust regulator on Wednesday (July 7) said it concluded investigations into 22 more incidents of tech firms violating the Anti-Monopoly Law, fining the companies 500,000 yuan (S$104,300) for each offence.

Companies involved include subsidiaries of tech behemoths Alibaba and Tencent, as well as ride-hailing platform Didi.

According to documents released by the State Administration for Market Regulation, firms had either formed joint ventures without prior authorisation, or had abused their dominant market position.

In one instance, a subsidiary of Didi had entered a joint venture with an automotive manufacturer based in the northeastern city of Changchun, but had failed to declare the partnership despite both companies' turnovers meeting the minimum quantum. Most of the other 21 cases have similar circumstances.

Some of the firms, including Tencent and Didi, had been censured for similar offences in late April.

This move is the latest in a series of actions against China's tech giants as Beijing steps up regulation of the industry, most recently investigating Didi for illegally collecting user data.

China issued a sweeping warning to its biggest companies, vowing to tighten oversight of data security and overseas listings just days after Didi Global's contentious decision to go public in the US.

While the statement from China's State Council on Tuesday (July 6) was thin on details, it suggests Beijing is preparing to intensify a crackdown on its corporate sector that has spanned everything from property debt and fintech to antitrust issues and now cybersecurity.

Rules for overseas listings will be revised, China's cabinet said, while publicly-traded firms will be held accountable for keeping their data secure. China also said it will step up its regulatory oversight of companies trading in offshore markets.

China's technology giants have wiped out a combined US$831 billion (S$1.12 trillion) since their February peaks, and Beijing's expanding crackdown on the sector is fueling investor concern that the selloff is far from over.

The move to rein in two of the most powerful corporate trends of the past decade - the rise of data-hungry tech titans and the flood of Chinese listings in the US - is rippling through markets as investors brace for a new era of tighter oversight from Beijing.

The Hang Seng Tech Index, whose members include many of China's biggest tech companies, fell as much as 1.9 per cent on Wednesday, poised for its sixth consecutive day of declines. Tencent Holdings and Meituan fell as much as 3.7 per cent, among the biggest decliners on the Hang Seng Index. Alibaba Group Holding dropped 2.1 per cent.

Didi, which is the focus of a cybersecurity probe, sank 20 per cent in in US trading on Tuesday to US$12.49, wiping out about US$15 billion of market value and taking the stock below the US$14 IPO price.

Investors are likely to take "a sell first, talk later approach" to limit policy risks in their portfolio, said Justin Tang, the head of Asian research at United First Partners in Singapore.

While there remains considerable uncertainty about how China will implement a crackdown, the impact has the potential to be far-reaching. Increased regulation is likely to slow the pace of Chinese listings in the US and reduce the lucrative fees that flow to Wall Street. Technology firms will face more restrictions on the use of data that makes their business so profitable. The risk of economic decoupling between China and the US will only grow as the two governments act to safeguard national security, especially in the sensitive technology industry.

"It is a big step from China, but on the other hand it is part of series of events that started over a year ago," said Peter Garnry, head of equity strategy at Saxo Bank in Hellerup, Denmark. "The uncertainty is still over to what degree all of this regulation will impact longer term profitability."

Chinese companies have flocked to US exchanges in recent years, especially from the tech industry, despite efforts by Beijing to encourage companies to list back home. Chinese firms have raised about US$76 billion through first-time share sales in the US in the past decade. Last month alone they raised US$7.9 billion, the most since Alibaba Group Holding's IPO in September 2014, according to data compiled by Bloomberg.

Chinese companies have listed abroad outside of regulators' purview largely through the Variable Interest Entity model. That system has never been formally endorsed by Beijing but has been used by virtually every tech titan to tap foreign investors. Under the structure, Chinese corporations transfer profits to an offshore entity with shares that foreign investors can then own.

US exchanges are at the same time becoming more hostile to Chinese companies, which may face delisting if they refuse to hand over financial information to American regulators. An effort by the US Securities and Exchange Commission to gain access to audits of overseas companies, which began under former President Donald Trump, is continuing under the Biden administration. Some Chinese firms have said China's national security laws prohibit them from turning over audit papers to US regulators.

Beijing has grown increasingly concerned over the amount of data that Didi and other technology firms hold The ride-hailing giant has vast amounts of sensitive information from half a billion annual active users, mostly in China. Over the past year, Xi's government has sought to gain control of such data, both to protect users from abuse and find a way to use it to spur broad-based economic growth rather than enrich billionaires.

China's campaign to impose tougher controls on the nation's tech firms was forcefully demonstrated late last year when authorities pulled Ant Group's US$35 billion dual listing in Shanghai and Hong Kong. But Chinese regulators currently don't possess the power to stop many of the nation's firms from listing in the US.

The latest statement from the State Council makes special provisions for cross-border data supervision, which suggests that overseeing sensitive information has become one of the most important regulatory fields in China, said Xia Hailong, a lawyer at Shanghai-based Shenlun law firm.

"Since there is no mechanism in place for cross-border supervision of securities, conducting a security review on data could serve as an effective tool for Chinese regulators to rein in overseas listed companies," Mr Xia said.

Chinese regulators asked Didi as early as three months ago to delay the listing because of national security concerns involving its huge trove of data, Bloomberg News reported. Online insurance technology firm Waterdrop Inc received pushback from regulators before its US IPO because its business model was seen as risky, Reuters reported in April.

Beijing's moves could prompt Chinese technology firms traded in the US to reconsider their listings, while future IPOs could be in doubt. One company poised to test sentiment soon is Hong Kong's on-demand logistics and delivery firm Lalamove. It filed confidentially for a US initial public offering last month, according to people with knowledge of the matter, and is seeking to raise at least $1 billion.

"The uncertainty about what is the regulators' end-game poses a lot of questions," said Brendan Ahern, chief investment officer at Krane Fund Advisors. "We've seen a pretty healthy IPO market from Chinese companies, and the regulators' decision will cast a pall over that."

Additional reporting by Elizabeth Law