Tencent, the dominant maker of China’s WeChat app, opened its WeChat to rivals’ links amid growing government scrutiny of the company’s potential penetration of the country’s communications and data-sharing sectors.
The company released a new WeChat version in China that allows companies and users to post links that appear to be from rival apps such as Facebook Inc.’s WhatsApp. As with earlier versions of WeChat, the links typically redirect users to the content on their main app.
“Everyone in the industry that has an internal content creation platform already has the capability of linking to others,” Zhu Hongpin, Tencent’s vice president of product management, said in an interview. “Our effort was more to encourage them.”
Since the announcement was made on July 24, around 100 companies — many of them firms not typically seen as competitors, such as internet giant Alibaba Group Holding Ltd. — have started using the new link to post content.
The government in late April said it would block cryptocurrency exchanges that aren’t registered with the state-run People’s Bank of China. Regulators in July ordered Tencent, the nation’s biggest social media platform, to improve its disclosure standards, including a requirement that user data be shared only with “qualified organizations.”
WeChat, which has roughly one billion users, provides a central place to conduct transactions and updates for its online community. Its growth has followed that of China’s smartphone market, which has increased by more than a quarter in the past year.
“We believe this has also been a deliberate strategy to influence corporate governance issues, such as pressure from regulators to bring other apps and email systems into compliance with existing Chinese regulations,” said Alex Yao, an analyst at JL Warren Capital in Shanghai.
Tencent was forced to close its 730,000 VPN services and move staff into co-working spaces to avoid a crackdown. The firm is also trying to control the flow of personal data for WeChat’s more than two billion users, after local regulators last year stripped it of a legal basis for storing users’ personal information.
It also serves as a hub for ad targeting, anti-monetization and social interaction, exposing it to mounting scrutiny from government regulators and existing corporate relations. The company is changing its terms and asking more users to log in before sharing any information.
Tencent’s networks could not always be trusted when it first launched the platform, Chairman Pony Ma said in a recent interview.
— Bloomberg News