Chinese regulators are demanding government approval of all new apps and app updates from Tencent, after a number of its offerings were accused of violating consumer interests, in the latest blow to the country’s most valuable technology company.
China’s Ministry of Industry and Information Technology (MIIT) will temporarily conduct “technology tests” to ensure Tencent’s apps meet their standards before the company can offer them to users, state media reported.
The demand has been issued shortly after China rolled out new data protection laws restricting how its technology companies can store and handle users’ personal information.
This year, MIIT has regularly released lists of apps from various developers that have been found to infringe on users’ rights. Nine Tencent apps have been named on the ministry’s listings, and China’s state-owned television company said it was “going against the industry’s corrective winds”.
Tencent has been in the government’s crosshairs this year as antitrust regulators targeted their agreement and the exclusive licensing agreements for their music unit.
Gaming is also one of Tencent’s core businesses, but in August, China introduced new restrictions on child gamblers as part of an industry repression, allowing them to play only three hours a week.
The regulatory cloud hampered the company’s revenue growth in the three months to September, falling 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 their existing offerings were still available.
“We are constantly working to improve the user protection features of our apps, and we also work regularly with relevant government agencies to ensure compliance with the law,” the company said. “Our apps remain functional and available for download.”
Chinese technology companies have faced a year of regulatory turbulence, presumably starting with the cancellation last November of a $ 37 billion IPO. from Jack Ma’s online finance company, Ant Group.
Xi Jinping, China’s president, has rolled out a new “common prosperity policy” that has addressed everything from social inequality to consumer rights.
When Tencent announced its third-quarter results, company president Martin Lau said stricter regulation was “the new normal”, both in China and internationally. The company has said it is “proactively” taking new rules in its business areas after previously trying to get ahead of regulators, especially when it came into play. In early August, Tencent cut the playing time of minors The Glory of the Kings, one of its flagship games.
Despite children making up a small portion of their sales, the move to limit the time minors played surprised some analysts who saw it as an “extremely restrictive policy”.