(Reuters) – Pony Ma, the founder of Tencent Holdings, China’s largest social media and video games company, met with antitrust watchdog officials this month to discuss compliance with his group, three people with direct knowledge told Reuters.
The meeting is the most concrete indication that China’s unprecedented antitrust action, which began with billionaire Jack Ma’s Alibaba business empire at the end of last year, could soon focus on other internet projects.
Beijing has pledged to strengthen oversight of its major technology ventures, which are among the world’s largest and most valuable, citing concerns that it has market power that distorts competition, abuses consumer data and violates consumer rights.
Tencent, whose WeChat messaging and payment mobile app is ubiquitous in China, is expected to take the next step for sharper investigations into monitoring regulations, the three people said.
The news of the meeting, which has not yet been reported, appears on Wednesday on the results of Tencent in December. According to Refinitiv data, analysts expect a profit increase of 42%, although the investor will focus on regulatory development.
Pony Ma, who rarely gives media interviews and has been out of the public eye for more than a year, was in Beijing this month for China’s annual parliamentary session and visited the SAMR (State Administration of Market Regulation) office the week before last. the people.
The founder of Tencent, which this month is considered the second richest person in China with a fortune of $ 74 billion, is a parliamentary delegate at Guangdong province, where the company is headquartered.
Tencent requested the meeting with the deputy head of SAMR, Gan Lin, and other senior officials.
Tencent and SAMR did not respond to Reuters’ requests for comment.
At the meeting, the two parties discussed how Tencent can better comply with antitrust rules, two of the people said.
Wu Zhenguo, the head of SAMR’s anti-monopolistic bureau, who was also present 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 investigating monopolistic practices by WeChat, and how the super-app may have undermined fair competition and put smaller competitors under pressure, two of the people said.
All the sources did not want to be named due to the sensitivity of the matter.
Tencent shares fell to 1.7% in a weaker Hong Kong market to reach the lowest level after the Reuters report.
CORRECTIVE ACTION
The meeting between Pony Ma, who is also the chairman and CEO of Tencent, and the antitrust officials took place a few days after he called for tighter control of the internet economy at China’s parliamentary meeting in Beijing.
Pony Ma’s discreet public profile stands in stark contrast to that of unrelated co-entrepreneur Jack Ma in Alibaba, whose public criticism of China’s regulators has sparked a series of events that have led Ant Group’s wallet of fintech subsidiary Ant Group stopped at $ 37 billion last November.
One of the people said that Tencent had not been officially notified by SAMR of any investigation into its activities, but he expects to hear from the regulator soon.
“As one of the big two in China, it’s perfectly normal for Tencent to feel anxious about the target,” said You Yunting, a lawyer for DeBund Law Offices in Shanghai, referring to Pony Ma’s meeting with government officials.
“There are two concerns for Tencent: a concentration of companies that can review could affect procurement agreements, while investigations and lawsuits over abuse of dominant market positions could harm the benefit of its platforms.”
Tencent tried to scramble the impact of potential moves against it to take corrective action.
Tencent must make concessions in a plan to merge the country’s two leading regional merger sites to solve antitrust problems, Reuters reported on Tuesday.
In a separate agreement, the firm, which had a 5% stake in local gambling industry Zhejiang Century Huatong Group, also planned to buy another 10%, said one of the people and another person with direct knowledge , which is named the largest shareholder.
Earlier this month, however, Tencent acquired 5% of Century Huatong and instead became the second-largest shareholder, looking for a potentially lengthy and complicated antitrust approval process, the two people said.
Reporting by Pei Li, Cheng Leng and Julie Zhu; Edited by Sumeet Chatterjee and Richard Pullin