Chinese regulators are demanding government approval of any new apps and app updates from Tencent after a number of its offerings were accused of violating consumer interests, in the latest blow for the nation’s most valuable tech company.
China’s ministry of industry and information technology (MIIT) will temporarily conduct “technology testing” to ensure Tencent’s apps meet its standards before the company can offer them to users, state media reported.
The requirement has been issued soon after China rolled out new data protection laws restricting how its tech companies can store and handle users’ personal information.
This year MIIT has regularly published lists of apps by different developers found violating users’ rights. Nine Tencent apps have been named on the ministry’s lists and China’s state broadcaster said the company was “going against the industry’s corrective winds”.
Tencent has found itself in the government’s crosshairs this year as antitrust regulators targeted its dealmaking and the exclusive licensing deals of its music unit.
Gaming is also one of Tencent’s core businesses, but in August China imposed new restrictions on child gamers as part of a crackdown on the industry, allowing them to play for only three hours a week.
The regulatory cloud dented the company’s revenue growth in the three months to September, dropping to 13 per cent from the 25 and 20 per cent recorded in the preceding two quarters.
Tencent confirmed MIIT’s move in a statement on Wednesday, and attempted to reassure investors by saying its existing offerings were still available.
“We are continuously working to enhance user protection features within our apps, and also have regular co-operation with relevant government agencies to ensure regulatory compliance,” the company said. “Our apps remain functional and available for download.”
Chinese technology companies have faced a year of regulatory turbulence that arguably started with the cancellation last November of a $37bn initial public offering by Jack Ma’s online finance company, Ant Group.
Xi Jinping, China’s president, has been rolling out a new “common prosperity” policy, which has targeted everything from social inequity to consumer rights.
When Tencent announced its third-quarter results, the company’s president Martin Lau said stricter regulation was “the new normal”, both in China and internationally. The company has said it is “proactively” embracing new rules in its business areas, after previously attempting to get ahead of regulators, particularly when it came to gaming. In early August, Tencent cut minors’ playing time on Honor of Kings, one of its flagship games.
Despite children making up a small part of their sales, the move to restrict the time minors played surprised some analysts, who viewed it as an “extremely restrictive policy”.