Chinese regulators have finally brought to a close their long-running crackdown on tech firms, handing out fines to two of the country’s largest tech companies, Ant Group and Tencent.

The financial giant Ant Group, which operates Alipay, the world’s largest digital payments platform, has been fined almost $1 billion for “illegal acts”, while an affiliate of rival Tencent has been given a $415 million penalty. The China Securities Regulatory Commission (CSRC) has said that, in view of Ant Group’s illegal and irregular acts in previous years, they have been fined 7.123 billion yuan (US$984 million), with the penalty including the confiscation of illegal income.

The CSRC has also said that most of the outstanding problems in the financial business sector of platform enterprises have now been rectified, and that they have shifted their work focus away from promoting the rectification of these companies and towards normalised supervision.

Alibaba shares rose 3.44% in Hong Kong after reports of the fine, indicating that investors saw the punishment as a sign that the crackdown was ending.Ant Group, in response to the fine, released a statement saying they would “comply with the terms of the penalty in all earnestness and sincerity and continue to further enhance our compliance governance”.

The fine related to corporate governance, financial consumer protection, participation in business activities of banking and insurance institutions, payment and settlement business, fulfilment of anti-money laundering obligations, and development of fund sales business.

The central bank also fined Tenpay, an online-payment firm operated by Ant rival Tencent, a total of nearly 3 billion yuan ($415 million), including the confiscation of more than 550 million yuan in ill-gotten income. In recent years, Ant Group has expanded into offering loans, credit, investments and insurance to hundreds of millions of consumers and small businesses, and this was seen as a challenge to vested interests in the country’s state-dominated financial sphere.

Ant Group was set to launch a record-breaking $35 billion Hong Kong-Shanghai IPO in 2020 when regulators abruptly called off the double listing, citing non-compliance with new capital requirements.

This was followed by the record $2.75 billion fine for alleged unfair practices to Alibaba in 2021, and the news that Alipay had been told by regulators to spin off its profitable micro-loan business and hand over customer data used to make its lending decisions to a new credit-scoring joint venture that is partly state-owned.

Chinese authorities poured cold water on reports that they had started discussions on potentially reviving Ant's IPO plans in June 2022. However, in a sign that the crackdown was easing, authorities said last December that Ant had won approval to raise 10.5 billion yuan for its consumer finance arm.

In January, Ant Group said Jack Ma no longer held controlling rights in the company – a move analysts speculated might have helped pull Ant and Alibaba out of the regulatory doghouse.

Overall, the move by Chinese regulators to ease their crackdown on tech firms and hand out fines to Ant Group and Tencent signals a new era of normalised regulation of tech companies in the country, with a focus on financial inclusion and financial consumer protection.