Tencent Holding’s backed $5.3bn merger of China’s two largest video gaming live-streaming platforms has been blocked by the Chinese regulator, State Administration for Market Regulation (SAMR). According to the antitrust regulator, the deal between Huya and Douyu International Holdings would strengthen the dominant position of Tencent Holdings in the online gaming space as it already controls 40% share in the industry through its stake of 37% in Huya and 38% in Douyu. Huya and Douyu are the biggest players in the sector holding 40% and 30% of sales and 45% and 35% of active users respectively. SAMR said that the merger “may have the effect of excluding or restricting competition, which is not conducive to fair competition and may damage the interests of consumers”. The merger plan announced last October aimed to create a $5.3bn behemoth with ~300mn monthly active subscribers and would have become a strong contender to Amazon.com’s streaming service Twitch. The blockage serves as a deterrent for other tech firms trying to take a dominant position in a sector with an aim of monopolizing and is inline with the government’s policies. Alibaba was fined CNY18.2bn ($2.8bn) in April by SAMR for breaching the country’s anti-monopoly law.