Chinese regulators demand government approval for new Tencent apps
Chinese regulators are demanding government approval for all new apps and app updates from Tencent after a number of its offerings have been accused of violating consumer interests, in the latest blow to the industry. most valuable technology company in the country.
China’s Ministry of Industry and Information Technology (MIIT) will temporarily conduct “technology tests” to ensure that Tencent’s applications meet its standards before the company can offer them to users, they said. state media reported.
The requirement was issued shortly after China rolled out new data protection laws restricting how its tech companies can store and manage users’ personal information.
This year, MIIT has regularly published lists of apps from different developers that violate user rights. Nine Tencent apps were named to the ministry’s lists and the Chinese state broadcaster said the company was “going against the corrective winds in the industry.”
Tencent found itself in the government’s crosshairs this year as antitrust regulators targeted its deals and exclusive licensing deals for its music unit.
Gambling is also one of Tencent’s main activities, but in August China imposed new restrictions on child gamers as part of the industry crackdown, allowing them to play just three hours a week.
The regulatory cloud hurt the company’s revenue growth in the three months leading up to September, falling to 13% from 25% and 20% in the previous two quarters.
Tencent confirmed MIIT’s decision in a statement on Wednesday and tried to reassure investors that its existing offerings were still available.
âWe are constantly working to improve the user protection features within our applications, and also regularly cooperate with relevant government agencies to ensure regulatory compliance,â the company said. âOur applications remain functional and available for download. “
Chinese tech companies have faced a year of regulatory turmoil that arguably began with the cancellation last November of a $ 37 billion initial public offering by online finance firm Jack Ma , Ant Group.
Xi Jinping, the Chinese president, has put in place a new âcommon prosperityâ policy, which targets everything from social inequalities to consumer rights.
When Tencent announced its third quarter results, company chairman Martin Lau said tougher regulation was “the new normal”, both in China and internationally. The company said it was “proactively” adopting new rules in its areas of business, having previously tried to get ahead of regulators, especially when it comes to gaming. At the beginning of August, Tencent reduced the playing time of minors on Honor of kings, one of its flagship games.
Although children make up a small portion of their sales, the decision to restrict underage play time has surprised some analysts, who have viewed it as “an extremely restrictive policy.”