Tencent boss said to have met China antitrust officials

HONG KONG • Mr Pony Ma, the founder of Tencent Holdings, China's biggest social media and video games company, met antitrust watchdog officials this month to discuss compliance at his group, three people with direct knowledge of the matter said.

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. Beijing 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, said the three people.

News of the meeting, which has not been previously reported, came ahead of Tencent's December quarter results yesterday, in which the company reported a forecast-beating 175 per cent rise in quarterly profit, helped by a surge in gaming revenues.

Speaking to reporters following the earnings announcement, Mr Pony Ma said the company was "working actively" with regulators on compliance, including combing through some of its previous investments. He did not refer to the meeting.

Tencent president Martin Lau said the company's interaction with the antitrust watchdog was part of the normal course of business. "We, Tencent, conduct meetings with regulators on a regular basis and this is one of the regular meetings that we have," Mr Lau said. "During the meeting, we had a discussion about a broad range of topics, and the main focus was actually on creating a healthy environment for innovation."

Mr 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, said the people.

The Tencent founder, ranked this month as China's second-richest person with a US$74 billion (S$99.6 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. Tencent and SAMR did not respond to Reuters' requests for comment.

At the meeting, the two parties discussed how Tencent could better comply with antitrust rules, two of the people said.

Mr 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, one of them said.

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, two of the people said.

All the sources declined to be named due to the sensitivity of the matter.

Tencent shares dropped as much as 1.7 per cent in a weaker Hong Kong market to touch the day's lowest level after the Reuters report. The stock ended down 0.8 per cent.

The meeting between Mr 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.

Mr 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 US$37 billion initial public offering last November.

REUTERS