Chinese internet giant Tencent Holdings may choose to divest more and pursue fewer acquisitions this year, as Beijing tightens oversight of the country’s Big Tech firms, South China Morning Post reported, citing analysts.
During the last year-end meeting, Pony Ma Huateng, the founder and chief executive of Tencent Holdings, said that his company should do its job without crossing any lines.
Chinese authorities have continued the crackdown on the high-tech sector under anti-monopoly law. Tencent, in particular, is one of the corporations that received the heaviest penalties.
According to a statement by China’s State Administration for Market Regulation (SAMR), Tencent-backed China Literature and Shenzhen Hive Box were fined 500,000 yuan ($79,000) for the first time in December 2020 for not reporting past deals correctly for antitrust reviews. Since then, this agency has penalized Tencent multiple times under China’s 2008 anti-monopoly law.
In 2021, China authorities prevented Tencent from merging Huya and DouYu, the country’s top two video game streaming sites. Had it been done, Tencent would get a market share of 70% in the video game live streaming industry.
Tencent was fined 500,000 yuan ($79,000) for its 2018 investment in the online education app Yuanfudao on Mar 12, 2021, though the regulator determined the deals themselves are not anti-competitive.
In August 2021, Tencent’s music streaming business terminated all exclusive licensing deals with global record labels to abide by the SAMR orders. Subsequently, the company was fined $79,000 for owning over 80% of music library resources in China.
At the annual central economic work conference last December, China signaled that they would be loosening the crackdown on Big Tech. Still, earlier this month, China slapped fines on Alibaba, Tencent, and Bilibili while SAMR targeted 43 unreported deals involving tech giants.