Singapore : Chinese authorities have ordered its biggest Internet companies to stop blocking links to their apps from their rivals, as Beijing seeks to boost competition in a region dominated by a handful of companies.
An official of the Ministry of Industry and Information Technology said on Monday that authorities have taken steps against blocking external links, which are the main focus of a campaign that began in July, after receiving several complaints from users.
Companies such as Tencent Holdings Ltd, Alibaba Group Holding Ltd, ByteDance Ltd and Baidu Inc were convened in a meeting with Chinese officials last Thursday to discuss the issue, people familiar with the matter said.
Blocking app users from accessing rivals’ services from within those apps has become common practice among large technology firms in China.
The ministry’s campaign is part of a broader crackdown on China’s technology sector. Regulatory measures have reduced the market capitalization of these companies by several billions of dollars. Internet giants such as Alibaba and Tencent have faced hefty fines for violations, including special sales arrangements to merchants and improperly reporting mergers and acquisitions.
The issue of platform interoperability has been an issue for many years, analysts said, and is a source of annoyance to Chinese consumers and the subject of lawsuits.
In 2018, when ByteDance’s short-video platform Douyin began to grow in popularity, many users realized they couldn’t directly click on Douyin links that were shared on Tencent’s ubiquitous WeChat messaging platform. Consumers also can’t easily open WeChat links from Alibaba’s e-commerce platforms such as Taobao and Tmall.
Tencent said it supports the government’s guidance and will make the necessary changes in phases. An Alibaba spokesman said it would fully comply with regulatory requirements, echoing a statement made by Chief Executive Daniel Zhang in an August earnings call.
In July, The Wall Street Journal reported that Alibaba and Tencent were considering opening their services to each other. People familiar with the matter told the Journal that Alibaba may introduce Tencent’s WeChat Pay to Taobao and Tmall. Some said Tencent could also make it easier to share Alibaba e-commerce listings on its WeChat messaging app.
The rules will be phased out, a ministry spokesperson said in a comment posted on the ministry’s website on Monday, without giving a clear timeline. Blocking the link hurts the rights of consumers and disrupts the market order, and companies that do not comply with the rules will be punished, he added.
In an online commentary published on Saturday, the Communist Party’s top discipline watchdog, the Central Commission for Discipline Inspection, said Beijing’s antitrust campaign could have a negative impact on the country’s tech giants in the short term, but “the best option in the long run”. Will happen. Period.”
Tencent’s Hong Kong-listed shares are down 15 per cent this year, while Alibaba’s Hong Kong shares are down 31 per cent.
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