Tencent must get regulatory approval before releasing new apps

People walk past a Tencent sign at the company’s headquarters in Shenzhen, Guangdong province, China August 7, 2020.

David Kirton | Reuters

GUANGZHOU, China – Tencent needs approval from Chinese regulators to send updates for its applications, state broadcaster CCTV reported on Wednesday.

The move comes after regulators discovered that several apps designed by China’s most valuable tech company had violated data protection rules multiple times this year.

Tencent’s app approvals are currently on hold. China’s Ministry of Industry and Information Technology must review all new applications and updates before they can be released. It could take seven days, CCTV reported, without citing any source.

“We are continuously working to improve the user protection features in our applications, and also regularly cooperate with relevant government agencies to ensure regulatory compliance. Our applications remain functional and available for download,” said a spokesperson for Tencent. to CNBC in a statement.

Shares of Tencent in Hong Kong rose more than 1% in morning trading.

Over the past year, China has tightened rules on the domestic tech sector, which for years has grown largely unimpeded by regulation. Beijing has introduced regulations in areas ranging from antitrust to how algorithms can be used.

One of the most important regulations adopted this year was a landmark law on the protection of personal data. Regulators focus heavily on how businesses collect and process data. The latest actions against Tencent are part of this process.

The latest move is another blow to Tencent as it has felt the impact of China’s regulatory crackdown. In August, regulators introduced rules limiting children under 18 to just three hours of online video games per week and during designated windows. At the time, Tencent said that only a small portion of its income came from these players.

Crackdown in other areas, such as the education sector, also weakened advertising appetite, which weighed on the company’s third-quarter earnings. Tencent’s third-quarter revenue was 142.4 billion yuan, up 13% from a year ago. This is its weakest quarterly revenue growth since its IPO in 2004, according to Reuters.

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