Trip.com Group Limited (TCOM) saw its shares drop sharply by 5.18% during pre-market trading on Thursday, reflecting investor concerns over regulatory scrutiny.

The decline follows China's State Administration for Market Regulation (SAMR) launching an antitrust investigation into the company for alleged abuse of its dominant market position. Under China's Anti-Monopoly Law, Trip.com could face fines ranging from 1% to 10% of its previous year's revenue—potentially up to $700 million—if found guilty. The company holds a 70% market share in China's online travel sector, per industry reports.

Analysts at Citi and Nomura suggest the probe may temporarily dampen investor sentiment but is unlikely to disrupt Trip.com's market leadership. However, competitors like Tongcheng and Meituan could benefit from reduced pricing control over hotels. Trip.com has pledged full cooperation with regulators while maintaining normal operations.