(Reuters) – Pony Ma, the low-profile founder of Tencent Holdings, China’s largest social media and video game company, met with antitrust officials this month to discuss compliance with his group, he told Reuters three people with direct knowledge about this issue.
The meeting is the most concrete indication so far that China’s unprecedented antitrust crackdown, which began late last year with billionaire Jack Ma’s Alibaba business empire, could soon target other Internet behemoths.
Beijing has vowed to strengthen the oversight of its major technology companies, which are among the largest and most valuable in the world, citing concerns that they have built a market power that stifles competition, misused consumer data and violated consumer rights.
Tencent, whose WeChat mobile messaging and payment app is ubiquitous in China, is expected to be the next line for more rigorous antitrust regulatory investigations, the three people said.
The news of the meeting, which was not reported, comes ahead of Tencent’s results for the quarter in December on Wednesday. Analysts expect a 42% profit increase, according to Refinitiv data, although investors will focus on developing regulations.
Pony Ma, who rarely interviews the media and has been out of the public eye for more than a year, was in Beijing this month for China’s annual parliamentary meeting and visited the State Administration for Market Regulation (MRSA) office with a week before, people said.
The founder of Tencent, ranked this month as the second richest person in China, with a fortune of 74 billion dollars, is a parliamentary delegate in Guangdong Province, where the company is headquartered.
Tencent requested a meeting with MRSA Deputy Chief Gan Lin and other senior officials, the three men said.
Tencent and SAMR did not respond to Reuters requests for comment.
At the meeting, the two sides discussed how Tencent could better comply with antitrust rules, two people said.
Wu Zhenguo, the head of MRSA’s antitrust office, who was also at the meeting, expressed concern about some of Tencent’s business practices and asked the group to abide by antitrust rules, one of them said.
SAMR is currently collecting information and analyzing WeChat’s monopolistic practices and how the super-application has stifled fair competition and pitted smaller rivals, two of the people said.
All sources declined to be named because of the sensitivity of the issue.
Tencent shares fell as much as 1.7% in a weaker Hong Kong market to reach the lowest level of the day according to the Reuters report.
CORRECTIVE ACTION
The meeting between Pony Ma, who is also Tencent’s president and CEO, and antitrust officials came days after he called for tighter governance of the Internet economy at China’s parliamentary meeting in Beijing.
Pony Ma’s low-key public profile contrasts sharply with that of fellow Alibaba entrepreneur Jack Ma, whose public criticism of China’s regulators triggered a chain of events that led to a last-minute shutdown of the IPO. fintech affiliate, Ant Group, of $ 37 billion in November last year.
One person said that Tencent has not been officially notified by MRSA of any investigation into its activities, but expects to receive regulators soon.
“Being one of China’s two greats, it’s perfectly normal for Tencent to feel uneasy about being targeted,” said You Yunting, a lawyer with DeBund’s Shanghai law firm, referring to Pony Ma’s meeting with law enforcement officials. regulation.
“There are two concerns for Tencent, a review of the concentration of companies could have an impact on acquisition transactions, while investigations and disputes over the abuse of dominant market positions could affect the advantage of its platforms.”
To cushion the impact of any potential moves against it, Tencent has struggled to take corrective action.
Tencent must make concessions in a plan to merge the country’s first two live streaming sites to address antitrust issues, Reuters reported on Tuesday.
In a separate business, the company, which owned a 5% stake in local gaming company Zhejiang Century Huatong Group, had also planned to buy another 10%, said one of the people and another person with direct knowledge, considering the largest shareholder.
However, earlier this month, Tencent acquired 5% of Century Huatong and instead became the second largest shareholder, trying to avoid a potentially long and complicated antitrust approval process, the two said.
Reporting by Pei Li, Cheng Leng and Julie Zhu; Editing by Sumeet Chatterjee and Richard Pullin