China suspends Tencent from updating existing app, launching new apps

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Chinese social media and gaming giant Tencent Holdings has been suspended from updating its existing apps or launching any new apps as part of Chinese authorities’ “temporary administrative guidance” against the company.

The Ministry of Industry and Information Technology (MIIT) has told app stores and platforms to implement the order from Wednesday, reported several Chinese news outlets including state-run chinastarmarket.cn.

In response, Tencent said in a statement late on Wednesday that it is cooperating with the authorities on inspecting its apps, indirectly confirming the media reports.

“We are continuously working to enhance user protection features within our apps, and also have regular cooperation with relevant government agencies to ensure regulatory compliance. Our apps remain functional and available for download,” Tencent said in its statement.

There are more than 70 apps published by Tencent that are active and there are more than 100 games published by Tencent Mobile Games, according to app tracking firm Qimai. It is not known how long the suspension will last and the MIIT has not release any official statement about the decision against Tencent.

Authorities has reportedly required Tencent submit any new apps or updates for inspections before they can be uploaded after a number of its apps were found to have committed violations, according to news outlet Yicai.

The report, citing unnamed sources, said Tencent had been required to do so after some of its apps were found to have infringed users’ rights and interests. It also said that the MIIT had recently issued a notice to say that between Nov. 24 to Dec. 31, all mobile apps and their updates will need to undergo a roughly seven-day-long review before they can be uploaded to app stores.

Tencent said its apps remained functional and available for download in response to Yicai’s and other local media reports.

The regulatory move comes amid Beijing’s tightening scrutiny of the tech sector. Beijing has been turbocharging its legislative efforts to regulate data in the country, having enacted the Cybersecurity Law in 2017, followed by the Data Security Law this September, which requires firms to undergo a security assessment to gain approval before sending user data overseas.

And in November China enacted the Personal Information Protection Law, one of the world’s toughest regulations for personal data security with far-reaching implications for cross-border data transfers and how companies operate within the country.

This year MIIT has regularly published lists of apps by different developers found violating users’ rights. Nine Tencent apps have been named on the ministry’s lists and China’s state broadcaster said the company was “going against the industry’s corrective winds”.

In a November 3 list of 38 apps named and shamed by the ministry for excessively collecting user data, three apps were developed by Tencent, namely Tencent News, a Karaoke app and QQ Music.

Tencent has found itself in the government’s crosshairs this year as antitrust regulators targeted its dealmaking and the exclusive licensing deals of its music unit.

Gaming is also one of Tencent’s core businesses, but in August China imposed new restrictions on child gamers as part of a crackdown on the industry, allowing them to play for only three hours a week.

When Tencent announced its third-quarter results, the company’s president Martin Lau said stricter regulation was “the new normal”, both in China and internationally. The company has said it is “proactively” embracing new rules in its business areas, after previously attempting to get ahead of regulators, particularly when it came to gaming.

In early August, Tencent cut minors’ playing time on Honor of Kings, one of its flagship games. Despite children making up a small part of their sales, the move to restrict the time minors played surprised some analysts, who viewed it as an “extremely restrictive policy”.