Tencent must seek regulatory approval before any new apps are released
People walk past a Tencent sign at the company’s headquarters in Shenzhen, Guangdong Province, China on Aug. 7, 2020.
David Kirton | Reuters
GUANGZHOU, China – Tencent must seek approval from Chinese regulators to send updates for its apps, state broadcaster CCTV reported on Wednesday.
The move comes after regulators discovered several apps from China’s most valuable tech company this year that violated privacy laws.
Tencent’s app approvals are currently on hold. China’s Ministry of Industry and Information Technology must review all new apps and updates before they can hit the market. This could take seven days, CCTV reported, without naming any sources.
“We are continuously working to improve the user protection functions in our apps and also work regularly with the relevant government authorities to ensure compliance with legal requirements. Our apps remain functional and available for download, ”a Tencent spokesman said in a statement to CNBC.
Tencent shares in Hong Kong rose more than 1% in morning trading.
Last year, China tightened the rules for its domestic technology sector, which has grown largely unencumbered by regulations for years. Beijing has introduced regulations in areas from antitrust law to the use of algorithms.
One of the biggest regulations passed this year was a landmark law on the protection of personal data. Regulators focus heavily on how companies collect and process data. The recent actions against Tencent are part of that process.
The latest move is another blow to Tencent, which has suffered the effects of China’s anti-regulation. In August, regulators introduced rules restricting children under the age of 18 to only three hours of online video games per week and during certain time windows. At the time, Tencent said only a small portion of its revenue comes from such players.
Crackdowns in other areas such as education have also weakened advertising thirst, which weighed on the company’s third quarter earnings. Tencent’s third-quarter revenue was 142.4 billion yuan, up 13% year over year. According to Reuters, this was the slowest quarterly revenue growth since going public in 2004.