Tencent confirms talks with regulators amid China tech crackdown
Tencent has confirmed it is in talks with Chinese antitrust regulators as authorities in Beijing ramp up the pressure on tech firms.
President Martin Lau today said the company’s founder Ma Huateng had held a voluntary meeting with antitrust watchdog officials this month to discuss compliance at the company.
He said the two sides had held a “discussion about a broad range of topics, and the main focus is actually on creating a healthy environment for innovation to happen in China”.
Beijing is mounting a major crackdown on tech giants in China after initially focusing on Jack Ma’s Alibaba empire.
Regulators blocked the $37bn initial public offering of Alibaba subsidiary Ant Group and ordered a restructuring of the company as a financial holding company.
Lau played down concerns about the prospect of Tencent being forced to create a financial holding company, saying: “As we understand, turning into a financial holding company should involve organizational change but does not impact businesses.”
Earlier this month the tech giant was fined for failing to seek approval for past investments such as its stake in online education app Yuanfudao.
Huateng said Tencent was working with regulators on compliance, including for previous investments, while chief strategy officer James Mitchell insisted the firm would continue with its usual practice of taking minority stakes in Chinese startups.
It came as Tencent posted a 26 per cent rise in quarterly revenue to 134bn yuan ($20.5bn) driven largely by surging demand for its online gaming business.
The company, which owns hit games Honor of Kings and PUBG Mobile, has cashed in on a sharp rise in paying users during the pandemic in both China and internationally.
But it is now facing increased pressure from Tiktok owner Bytedance, which is making moves into the online gaming business and has filed a lawsuit against Tencent accusing it of monopolistic behaviour.