Chinese regulators are demanding the government’s approval of any new applications and application updates from Tencent after a number of its offerings were accused of violating consumer interests, most recently for the country’s most valuable technology company.
China’s Ministry of Industry and Information Technology (MIIT) will temporarily conduct “technology testing” to ensure that Tencent’s applications meet its standards before the company can offer them to users, state media reported.
The requirement was issued shortly after China new data protection laws rolled out limits how its technology companies can store and handle users’ personal information.
This year, MIIT has regularly published lists of applications by various developers that are found to violate users’ rights. Nine Tencent applications have been named on the ministry’s list and China’s state broadcaster said the company was “going against the industry’s affirmative action winds”.
Tencent found itself in the government’s sights this year when antitrust regulators targeted its transactions and the exclusive licensing transactions of its music unit.
Gaming is also one of Tencent’s core businesses, but in August China imposed new restrictions on child players as part of repression on the industry, allowing them to play only three hours a week.
The regulatory cloud hurt the company’s revenue growth in the three months to September, dropping to 13 percent from the 25 and 20 percent recorded in the previous two quarters.
Tencent confirmed MIIT’s move in a statement on Wednesday, trying to reassure investors by saying its existing offers are still available.
“We are constantly working to improve user protection features within our applications, and also have regular collaborations with relevant government agencies to ensure regulatory compliance,” the company said. “Our applications remain functional and available for download.”
Chinese technology companies have faced a year of regulatory turmoil that likely began with the cancellation last November of an initial $ 37 billion public offering by Jack Ma’s online finance company, Ant Group.
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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 said it was “proactively” adopting new rules in its business areas, having previously tried to get ahead of regulators, especially when it comes to games. In early August, Tencent shortened minors’ playing time Honor of Kings, one of his flagship games.
Despite children making up a small portion of their sales, the move to limit the time minors play has surprised some analysts, who saw it as an “extremely restrictive policy”.