Tencent founder Ma Huateng has met with officials from the Communist Party’s antitrust regulator in Beijing this month to discuss Tencent’s compliance issues, sources close to the matter told foreign media today. This suggests that the anti-monopoly crackdown by the Chinese Communist Party authorities may soon extend to other Chinese online giants, following Alibaba’s lead.
Ma Huateng, founder of Tencent Holdings, mainland China’s largest social media and video game company, met with officials from the Communist Party’s antitrust regulator this month to discuss the company’s compliance, two people with direct knowledge of the matter said.
The meeting was the most concrete sign that the Communist Party’s unprecedented anti-monopoly drive, which began late last year, may soon be targeting other Internet giants. Jack Ma‘s Alibaba business empire was the first to bear the brunt last year.
The Communist Party has vowed to tighten regulations on large technology companies, fearing they already have the market power to stifle competition, misuse consumer data and violate consumer rights. These companies rank among the world’s largest and most valuable companies.
Tencent is expected to be the next company to face stricter antitrust regulation investigations, said the two people mentioned above and another person with direct knowledge of the matter. Tencent’s WeChat instant messaging and mobile payment apps are very popular in China.
Tencent is due to report results for the December quarter on Wednesday. Analysts expect Tencent’s quarterly profit to rise 42 percent, according to Lufte, although investors will focus on regulatory developments.
Ma, who has been away from the public eye for more than a year, attended the two sessions in Beijing this month and visited the offices of the State Administration of Market Regulation (SAMR) last week, people familiar with the matter said.
Ma, a deputy to the National People’s Congress in Guangdong province, where Tencent is based, asked to meet with Gan Lin, deputy director of the State Administration of Market Regulation, and other senior officials, said the two people with direct knowledge of the matter.
Tencent Holdings and the State Administration of Market Regulation did not respond to Reuters’ request for comment.
A source said the two sides discussed how Tencent Holdings could better comply with anti-monopoly regulations during the meeting. Tencent Holdings has a market capitalization of $776 billion, making it Hong Kong‘s largest stock by market capitalization.
Wu Zhenguo, director of the State Administration of Market Supervision and Administration’s anti-monopoly bureau, also attended the meeting and expressed concerns about some of Tencent Holdings’ business operations and asked Tencent Holdings to comply with anti-monopoly regulations, a second source said.
The two sources said the State Administration of Market Supervision and Administration is gathering information and investigating WeChat’s monopolistic practices and how the App undermines fair competition and squeezes out smaller rivals.
It is not yet known whether the State Administration of Market Supervision and Administration officials have pointed out to Tencent executives specific cases of the company’s failure to comply with antitrust rules. Tencent Holdings is the world’s largest video game company as measured by revenue.
All sources declined to be named because of the sensitivity of the matter.
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