You would expect market cap of the largest players to decline if the market becomes more competitive... which was China's primary goal with their recent crackdown.

They proactively forced interconnectivity and limited the ability for companies to make "walled-garden peudo-monopolies", as we have in the US with Apple and Google.

If the same happens here (through act of congress, or legal outcomes), you can expect their market caps to decline as well. A decline in market cap doesn't speak at all to whether it's beneficial to the industry or consumers

> They proactively forced interconnectivity and limited the ability for companies to make "walled-garden peudo-monopolies", as we have in the US with Apple and Google.

WeChat is the inspiration for the idea of the "everything app" that so many US companies want to create but have always failed to. Has it somehow been newly limited in its ability to control an absurd percentage of all Chinese internet-connected activity?

This was and is part of their goal, yes.

https://asia.nikkei.com/Business/Technology/Beijing-asks-Ten...

"Beijing asks Tencent to lower WeChat's mobile payment market share"

https://www.forbes.com/sites/zennonkapron/2022/11/09/chinas-...

https://www.business-standard.com/world-news/china-may-impos...

"China is planning to introduce a new mobile payment regulation aimed at reducing the market share of Tencent Holdings' WeChat app, similar to efforts made by the National Payments Corporation of India to curb Google Pay and Phone's growing dominance in the market"

China's methods are more authoritarian than are viable in the west. But the general premise of a competitive market being better for society than dominance by a small number of firms is supported well by history