As government regulators in China increase tech industry oversight, Tencent said it will comply with new laws intended to curb antitrust activities and tighten FinTech acceleration, according to a Bloomberg report on Friday (Nov. 13),
Beijing’s proposed new laws had a negative effect on the market value of the country’s tech leaders like Tencent and Alibaba, dropping some $290 million in two days.
On a Thursday (Nov. 12) earnings call, Martin Lau, Tencent president, told analysts that the proposed new laws will not overly affect its online entertainment and gaming business. The regulators are looking more closely at transaction-based platforms, Lau said, per Bloomberg.
“We’ll work very constructively with the regulators to ensure our compliance,” Lau said, according to a Wall Street Journal report.
The biggest video game firm by revenue, Shenzhen-based Tencent’s profit surged 89 percent in September to reach $5.81 billion, fueled by the pandemic. Its business units span social media, video streaming, digital payments and wealth management.
The new draft regulations come on the heels of China’s abrupt decision to pause Ant’s initial public offering last week. Jack Ma’s Ant Group is the financial arm of his Alibaba Group. The draft was issued by China’s State Administration for Market Regulation (SAMR) and is intended to halt anti-competitive practices among tech platforms. Regulators hinted that FinTech companies could be treated more like banks.
The payments landscape was threatened by President Trump’s executive orders in August banning ByteDance’s TikTok and Tencent’s WeChat, citing national security. TikTok is already banned in India, Australia and other countries.
Alipay and WeChat have been under scrutiny by China’s State Council’s Anti-Monopoly Commission. The People’s Bank of China has alleged that digital payment companies use their might to stifle rivals.
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