China is preparing a substantial fine for Tencent Holdings (0700.HK) as part of its sweeping antitrust clampdown on the country’s internet giants, but it is likely to be less than the record $2.75 billion penalty imposed on Alibaba earlier this month, two people with direct knowledge of the matter said.

Tencent should expect a penalty of at least 10 billion yuan ($1.54 billion), significant enough for the State Administration of Market Regulation (SAMR) to make an example of it, both people said.

Tencent faces penalties for not properly reporting past acquisitions and investments for antitrust reviews, an offence with a fine capped at 500,000 yuan per case, and for anticompetitive practices in some of its businesses, with music streaming in particular focus, said the sources.

Neither SAMR nor Tencent immediately responded to Reuters’ requests for comment.

“The attitude from the regulator is that unlike Alibaba you are not the biggest target here, but it would be impossible not to penalise Tencent now that the campaign is in action,” said one of the people.

China has in recent months sought to curb the economic and social power of its once loosely regulated internet giants, in a clampdown backed by President Xi Jinping.

Tencent and Alibaba Group Holding Ltd (9988.HK) are China’s two biggest tech conglomerates, with market values of $776 billion and $642 billion, respectively.

Earlier this month, SAMR imposed its record fine on Alibaba after an investigation found the e-commerce firm had abused its dominant market position for several years.

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How often have you heard or read someone use a sports analogy to describe commercial society? Games are great fun, but they have winners and losers in ways exchanges don’t. Exchange is not, as Manuel F. Ayau reminds us, a zero-sum game. Here are a few ways sports and games don’t map cleanly into the business world.

The Market is Not Monopoly. This classic from Parker Brothers, which is outstandingly enjoyable if played correctly, combines just the right amount of acumen with just the right amount of randomness. Your every move involves a roll of the dice, but once you’ve handled what randomness has thrown at you, you can start wheeling and dealing. When I was in college, a friend who was doing his student teaching noted that the high school teacher he was working for wanted to try to teach the students the lessons on economics by having them play Monopoly. At the time, I thought this was a terrible idea. I only grew in this conviction over time, especially after Benjamin Powell and David Skarbek published this fun piece explaining how “Parker Brothers Gets it Wrong.” Monopoly has a clearly-defined winner (whoever is left standing at the end of the game) and clearly-defined losers (everyone else). You win the game by systematically bankrupting your opponents. Every trade you make is strategic in the sense that your friend on one turn will be your enemy on another, and you know that only one of you will be left standing. Maybe this is a good metaphor for the real estate industry in a very well-defined space. It is not, however, a good metaphor for commercial society.

“A Level Playing Field.” What matters is having fair rules that treat everyone equally. This is definitely where every society in history has failed miserably. Once again, though, business isn’t a game we play against one another. It’s like one of those cooperative games where you work together to solve a puzzle or something. No one should get special privileges.

In games like golf and bowling where there’s some friendly competition, people use handicaps to even the odds a little bit. When I play Harry Potter Trivial Pursuit with my daughter, she has to answer every question on the card while I only have to answer one (I still lose badly). This doesn’t translate to commercial society, though. Golf, bowling, and Trivial Pursuit are zero-sum games with winners and losers. In what is “properly speaking, a commercial society,” you improve your position by helping other people improve theirs—and not to your disadvantage.

Life Isn’t A Race. The same is true of a race. There is no “starting line.” Someone born into a family might have a better chance of gaining admission to an elite college or university, but there are a lot of substitutes out there for Harvard, Stanford, and Yale (might I recommend one?). If you define things narrowly enough, we’re playing zero-sum games in the very short run. Someone else got the job at Harvard I wish I had, and I can tell myself “if only” stories all day long about how if only this thing or that thing had been different, I would have developed the technical and analytical skills that would have placed me at the highest ranks of the economics profession. Just because someone else has a job at Harvard or Princeton, though, doesn’t mean I can’t have a perfectly fine job at Samford and a perfectly fulfilling life in Birmingham.

It’s easy to make the mistake of thinking about competition incorrectly when you’re defining things too narrowly. Another firm that makes a product very similar to yours is definitely a competitor. Potential customers, however, are not—though it’s easy to think adversarially about negotiating and efforts to split the gains from trade. Once you make a deal, there might be this nagging sensation that you could have gotten a slightly better deal if only the scoundrel across the table from you weren’t so selfish (why her regard to her own interests rather than yours is blameworthy is more or less unanalyzed). You shouldn’t lose sight of the fact that you both agreed to the deal because it made you both better off.

Sports and gaming metaphors certainly have their place, but if we take them too seriously we get lost in details and lose sight of the greatest positive-sum game in the world: specialization and division of labor. When you’re bowling or playing a board game, there’s a winner and a loser. When you’re bargaining, however, everyone’s a winner.

With stocks tumbling following the report that Joe Biden is considering a proposal that would double the capital gains tax, as investors dump in hopes of locking in existing cap gains rates – an exercise in futility if Biden and the socialists in Congress decide to make such a tax change retroactive to all of 2021 – Bloomberg quickly polled several Wall Street traders who focused on the policy’s implications for investing, and concluded that while it was too soon to panic, prospects of a higher levy on stock profits could spark near-term selling as investors look to skirt a higher rate.

Here are some hot takes, courtesy of Bloomberg:

Chris O’Keefe, managing director at Logan Capital Management

The first impact would be people deciding they are either going to take their gains now to try to get ahead of it. You could see people pull forward their gains to this year. It would potentially reduce the flow of capital because people would be less willing to take gains and move onto something else. People would be less willing to trade if they had to pay a tax that high.

Chris Zaccarelli, chief investment officer for Independent Advisor Alliance

It will incentivize selling this year before it does anything else. In the years to come, it will probably discourage selling, to some extent, but may also discourage buying as well as people look at other things to do with their money. The higher the taxes, the less people are likely to participate in activities that cost them tax.

Dan Suzuki, Richard Bernstein Advisors LLC’s deputy chief investment officer

It’s more aggressive than what people were expecting. I would personally fade the reaction though. Seems very unlikely that it will pass in its current state, so it would be heavily diluted.

Sameer Samana, Wells Fargo Investment Institute’s senior global market strategist

If this is the start of less market-friendly policies, it could make the gains from here a lot choppier. We worry less about an increase in corporate tax rates and more about capital gains taxes/changes in stepped up basis. Those latter two have a much more chilling and direct effect on how people invest.

Max Gokhman, head of asset allocation at Pacific Life Fund Advisors

I don’t think anyone is truly surprised that Biden is unveiling a cap gains tax, but what few people expected is that he’d do it so soon and in this magnitude. Unless it’s effective retroactively for 2021, it’s likely to be a 2022 rule — in that case you will see at least marginal selling this year. And while retail investors get a lot of press right now for being a dominant force in day-to-day volume, the reality is that most stocks held by individuals are held by the wealthiest ones.

Kim Forrest, chief investment officer of Bokeh Capital Partners

Prices are set by the balance of buyers and sellers so if you have more incentive to be a more active trader to reduce taxes, that’s going to put limits on how high stocks can go because there will be more sellers. And that’s the market mechanism on any given day. I’m not saying that ultimately but you’re artificially creating sales.

Chris Grisanti, chief equity strategist at MAI Capital Management

The devil will be in the details — will it be retroactive to January 1 of this year and then you wouldn’t need to sell right away? Will it be the beginning of next year? That all begs the question, will it get passed? With taxes especially there’s a lot of horse trading before the final deal. There are a lot of moving parts. One thing investors can be sure of is that taxes are going up and we have to at least partially pay for all the money we’ve been spending on stimulus.

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The EU released draft laws that would regulate facial recognition and uses of algorithms. If it passes, the policy will impact companies in the US and China.

THE EUROPEAN UNION proposed rules that would restrict or ban some uses of artificial intelligence within its borders, including by tech giants based in the US and China.

The rules are the most significant international effort to regulate AI to date, covering facial recognition, autonomous driving, and the algorithms that drive online advertising, automated hiring, and credit scoring. The proposed rules could help shape global norms and regulations around a promising but contentious technology.

“There’s a very important message globally that certain applications of AI are not permissible in a society founded on democracy, rule of law, fundamental rights,” says Daniel Leufer, Europe policy analyst with Access Now, a European digital rights nonprofit. Leufer says the proposed rules are vague, but represent a significant step toward checking potentially harmful uses of the technology.

The debate is likely to be watched closely abroad. The rules would apply to any company selling products or services in the EU.

Other advocates say there are too many loopholes in the EU proposals to protect citizens from many misuses of AI. “The fact that there are some sort of prohibitions is positive,” says Ella Jakubowska, policy and campaigns officer at European Digital Rights (EDRi), based in Brussels. But she says certain provisions would allow companies and government authorities to keep using AI in dubious ways.

The proposed regulations suggest, for example, prohibiting “high risk” applications of AI, including law enforcement use of AI for facial recognition—but only when the technology is used to spot people in real time in public spaces. This provision also suggests potential exceptions when police are investigating a crime that could carry a sentence of at least three years.

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