After carefully addressing the dominant position of Alibaba and Ant Group, the Chinese government is scrutinizing another of its tech giants: Tencent. According to three anonymous sources reported by Reuters, in March 2021, Pony Ma, the founder and CEO of Tencent – not to be confused with Jack Ma, the founder of Alibaba – met with the Chinese National Market Regulatory Administration (SAMR). The exchange concerned compliance with the antitrust laws of WeChat’s parent company. A senior SAMR official expressed concern about Tencent’s business practices.
While Pony Ma communicates little with the media and has been absent from public life for almost a year, he spent the month of March in Beijing. In the planning of the businessman: an annual parliamentary meeting and another with the SAMR. This second meeting comes a few days after Pony Ma called for stricter digital governance. The businessman has risen to the rank of second richest personality in China and occupies the post of parliamentary delegate of the province of Guangdong, where the headquarters of Tencent is located. His group represents the largest capitalization of the Hong Kong stock exchange with a valuation of 776 billion dollars.
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“As one of the two greats in China, it is perfectly normal that Tencent feared being targeted”
On March 15, 2021, Tencent was fined $ 77,000. The recent meeting between Pony Ma and officials of the Chinese antitrust commission affirms the government’s desire to extend the policy taken vis-à-vis Alibaba to other digital companies. According to the sources of Reuters, Tencent has not yet been officially notified of a SAMR investigation, but expects to be soon. Separately, WeChat’s parent company requested to meet Gan Li, the deputy director of SAMR, as well as other senior officials. Neither Tencent nor SAMR responded to requests for comment from Reuters.
“As one of the two greats in China, it is perfectly normal that Tencent was afraid of being targeted,” said Reuters You Yunting, lawyer at DeBund Law Offices based in Shanghai. On Tuesday, March 30, Tencent is due to review the possible merger of two video game sites so as not to violate competition laws. In addition, Tencent had planned to buy 10% stake in Zhejiang Century Huatong Group, a games company in which it already held 5% stake. Eventually Tencent bought only an additional 5% and became the second largest shareholder of Zhejiang Century Huatong Group, thus avoiding a potential antitrust case.
Whether in the United States or in China, the dominant position of the digital giants occupies the competition regulatory authorities. Beijing’s fears relate to the sustainability of the market and the use of data collected by tech companies. The WeChat messaging app offers payment services. Banking data says a lot about consumers, and the Chinese Communist Party has been trying to get its hands on it for the past few years. According to the three sources of Reuters, WeChat would be the next app to be fully investigated.