(Reuters) – Pony Ma, the low-profile founder of Tencent Holdings, China’s largest video game and video game company, met this month with antitrust surveillance officials to discuss compliance with his group, they told Reuters three people with direct knowledge of the matter.
The meeting is the most concrete indication that China’s unprecedented antitrust crackdown, which began late last year with billionaire Jack Ma’s Alibaba business empire, could soon target other major monitors. ‘Internet.
Beijing has vowed to strengthen the oversight of its large technology companies, which rank among the largest and most valuable in the world, and said they have built a market power that stifles competition, misused consumer data and violated consumer rights.
Tencent, the mobile messaging and payment app WeChat that is ubiquitous in China, is expected to be the next sharpest line of antitrust regulatory research, the three people said.
The news of the meeting, which has not been reported, is ahead of the results for the December quarter of Tencent on Wednesday. According to Refinitiv data, analysts expect a 42% increase in profit, although investors will focus on regulatory developments.
Pony Ma, who rarely does media interviews and had been out of public view for more than a year, was in Beijing this month for China’s annual parliamentary meeting and visited the office of the State Administration of Market Regulation (SAMR) the previous week. the people.
The founder of Tencent, ranked this month as the second richest person in China with a fortune of $ 74 billion, is a parliamentary delegate in Guangdong Province, where the company is headquartered.
Tencent requested the meeting with MRSA Deputy Director Gan Lin, and other senior officials, the three people said.
Tencent and SAMR did not respond to requests for Reuters comments.
At the meeting, the two sides discussed how Tencent could better comply with antitrust rules, two of the people said.
Wu Zhenguo, the head of SAMR’s antitrust office, who was also at the meeting, expressed concern about some of Tencent’s business practices and asked the group to comply with antitrust rules, one of them said. .
SAMR is currently gathering information and studying WeChat’s monopolistic practices, and how overapplication has possibly crushed fair competition and squeezed smaller rivals, two of the people said.
All sources rejected his name due to the sensitivity of the matter.
Tencent shares fell as much as 1.7% in a weaker Hong Kong market to hit the lowest level of the day after the Reuters report.
CORRECTIVE ACTION
The meeting between Pony Ma, who is also president and CEO of Tencent, and antitrust officials came just days after he called for tighter governance of the Internet economy at China’s parliamentary meeting in Beijing.
Pony Ma’s discreet public profile contrasts sharply with fellow unrelated businessman Jack Ma on Alibaba, public criticism of Chinese regulators triggered a string of events that led to the arrest at the last minute of the IPO $ 37 billion Ant Group, a subsidiary of fintech technology.
One person said Tencent had not been officially notified by SAMR of any investigation into its activities, but hopes to hear from the regulator soon.
“As one of China’s two greats, it’s perfectly normal for Tencent to feel anxious to be objective,” said You Yunting, a lawyer at Shanghai-based DeBund’s law firms, referring to Pony Ma’s meeting with regulatory officers.
“There are two concerns for Tencent, a review of the concentration of companies could affect acquisition agreements, while research and litigation on the abuse of dominant market positions could harm the advantage of their platforms” .
To cushion the impact of any possible move against it, Tencent has strived to take corrective action.
Tencent must offer concessions in a plan to merge the country’s top two video game streaming sites to address antitrust concerns, Reuters reported Tuesday.
In a separate agreement, the firm, which had a 5% stake in local gaming firm Zhejiang Century Huatong Group, had also planned to buy another 10%, according to one person and another person with direct knowledge, considering the main shareholder.
Earlier this month, however, Tencent acquired 5% of Century Huatong and became the second largest shareholder, seeking to avoid a potentially long and complicated antitrust approval process, the two said.
Reports by Pei Li, Cheng Leng and Julie Zhu; Edited by Sumeet Chatterjee and Richard Pullin