Ma meets China antitrust officials as scrutiny tightens


Sources say that Pony Ma, the founder of Tencent Holdings, China’s biggest social media and video games company, met with antitrust watchdog officials this month to discuss compliance at his group.

The meeting is the most concrete indication yet that China’s unprecedented antitrust crackdown, which started late last year with billionaire Jack Ma’s Alibaba business empire, could soon target other internet behemoths.

China has vowed to strengthen oversight of its big tech firms, which rank among the world’s largest and most valuable, citing concerns that they have built market power that stifles competition, misused consumer data and violated consumer rights.

Tencent, whose WeChat messaging and payment mobile app is ubiquitous in China, is expected to be the next in line for sharper antitrust regulatory inquiries.

News of the meeting, which has not been reported, comes ahead of Tencent’s December quarter results on Wednesday. Analysts expect a 42% profit rise, according to Refinitiv data, although the investor focus will be on regulatory developments.

Pony Ma, who seldom gives media interviews and had been out of the public eye for more than a year, was in Beijing this month for China’s annual parliamentary meeting and visited the State Administration of Market Regulation (SAMR) office the week before last.

The Tencent founder, ranked this month as China’s second-richest person with a $74 billion fortune, is a parliamentary delegate with Guangdong province, where the company is headquartered.

Tencent requested the meeting with SAMR deputy head Gan Lin and other senior officials, said the three people.

At the meeting, the two parties discussed how Tencent could better comply with antitrust rules, the sources added.

Wu Zhenguo, the head of SAMR’s anti-monopoly bureau, who was also at the meeting, expressed concern about some of Tencent’s business practices, and asked the group to comply with antitrust rules.

SAMR is currently gathering information and looking into monopolistic practices by WeChat, and how the super app has possibly squashed fair competition and squeezed smaller rivals.

Tencent shares dropped as much as 1.7% in a weaker Hong Kong market to touch the day’s lowest level.

The meeting between Pony Ma, who is also Tencent’s chairman and chief executive, and the antitrust officials came a few days after he called for tighter governance of the internet economy at China’s parliamentary meeting in Beijing.

Pony Ma’s discreet public profile is in sharp contrast to that of unrelated fellow entrepreneur Jack Ma at Alibaba, whose public criticism of China’s regulators triggered a chain of events that resulted in the last minute halting of fintech affiliate Ant Group’s $37 billion IPO last November.

Sources say that Tencent had not been officially notified by SAMR of any investigation into its activities, but is expecting to hear from the regulator soon.

To cushion the impact of any potential moves against it, Tencent has been scrambling to take corrective action.

Tencent is having to offer concessions in a plan to merge the country’s top two videogame live-streaming sites in order to resolve antitrust concerns, Reuters reported on Tuesday.

In a separate deal, the firm, which held a 5% stake in local gaming firm Zhejiang Century Huatong Group, had also planned to buy another 10%, said one of the people and another person with direct knowledge, maing it the largest shareholder.

Earlier this month, however, Tencent acquired 5% of Century Huatong and became the second-largest shareholder instead, looking to avoid a potentially lengthy and complicated antitrust approval process, the two people said.