Tencent becomes the target of a string of fresh anti-monopoly complaints

12 Feb, 2021 02:49
source: Singularity Financial

Singularity Financial Hong Kong February 12, 2020 –  About an hour past traditional Chinese New Year (Feb 12, Friday) , Huawei Technologies announced it had suspended cooperation with Tencent Holdings on mobile game, and would for the time being remove all the firm’s gaming offerings from its app — even smash hit “Honor of Kings.”

The firm said Tencent had one day earlier unilaterally changed the nature of the two firms’ relationship. Huawei did not agree with the changes, forcing it to “halt cooperation.”

“Tencent met with Chinese smartphone manufacturers, trying to convince them to lower their commissions to 30%, the same as Apple. Other manufacturers were on board, but Huawei declined the offer, insisting on a 50% rate,” a source with knowledge of Tencent’s negotiations told Caixin.

Tencent – the target of a string of fresh anti-monopoly complaints

ByteDance’s Chinese short video app Douyin has filed a complaint with a court in Beijing to sue Tencent Holdings for monopolistic behaviour and asked for 90 million yuan ($13.94 million) in compensation, ByteDance said on last Tuesday.  And ByteDance confirmed that the lawsuit it filed against Tencent over monopoly claims has been accepted by a local court in Beijing.

ByteDance says Tencent was restricting access to content from Douyin on its WeChat and QQ messaging platforms, and abusing its dominant position in the market. While Douyin had 600 million daily active users as of August last year, WeChat had more than 1.1 billion monthly active users worldwide as of January, the vast majority of them in China.

Also this week a General Motors venture with SAIC Motor Corp, along with smart vehicle tech supplier PATEO, jointly filed the complaint to Chinese regulators, accused Tencent of abusing its messaging app’s dominant market position to restrict sales of its products.

PATEO offers voice recognition features and other mobile applications that rely on Tencent’s multipurpose super app WeChat. The company said Tencent has been asking car companies to stop using its Internet of Vehicles products since August 2020.

China’s SAMR tightened its grip on top tech companies

Over the past few months, China’s SAMR (State Administration for Market Regulation) tightened its grip on the country’s top tech companies. It fined Tencent and Alibaba over unapproved acquisitions last December, and recently introduced new rules to rein in China’s two largest payment platforms, Tencent’s WeChat Pay and Alibaba-backed AliPay.

The SAMR launched an antitrust probe into Alibaba’s e-commerce business in late December, and demanded that its marketplaces end their exclusive deals with merchants and aggressive pricing strategies. Complaints from Alibaba’s rivals, including JD.com and Pinduoduo, reportedly sparked that probe.

On Thursday an executive at Tencent Holdings has been detained by Chinese authorities in relation to the corruption investigation against Sun Lijun, a former vice-minister at the powerful Ministry of Public Security. Pony Ma Huateng, the founder and chief executive officer of Tencent, has not been accused of any wrongdoing, WSJ said.