Shares in Shenzhen-based media titan Tencent tumbled on Monday following China’s verdict to restrict its private music licensing deals with record labels around the globe, halting the platform’s efforts to show sovereignty over online music streaming in the country.
On Saturday, China’s State Administration of Market Regulations (SAMR) announced that the firm is not abiding by the country’s anti-monopoly rules regarding its interests in the online music market.
This is demonstrated in authority’s latest quest to force the music platform to give up exclusive rights to music labels revealing the Chinese government’s scrutiny over the music streaming firm.
Chinese authorities instructed Tencent and its associated companies to end any existing agreement in the upcoming 30 days after receiving the regulatory notice, and must not indulge in any private copyright agreements with upstream owners.
During that time, Chinese regulators ordered the music streaming titan to pay a fine of $77,000, as a result to its actions.
This is one of China’s latest actions held against some of the country’s rising Big Tech firms, in its attempt to step up its anti-monopoly actions.
As tensions escalate between China and its Big Tech firms, authorities have been investigating some of the country’s most influential tech platforms, such as Alibaba, ride-hailing app Didi, and Tencent’s messaging toll QQ.
In Hong Kong, Tencent Holding shares witnessed a whopping drop by 5.7 percent in its market value, whereas Tencent Music Entertainment shares were lower by 6.9 percent.
Some of the world’s most famous record labels have all conducted exclusive deals with the Chinese streaming platform which gave it access to thousands of music catalogues.
Some of these big names include Universal Music, Sony Music, and Warner Music.
Back in 2016, Chinese internet giant Tencent approved to the acquisition of controlling stake in China’s biggest music-streaming company in a deal with China Music Corp.
This deal turned Tencent into one of China’s most important market leaders as it brought the country’s top mobile music applications together, by handing it rights to China Music Corp. which about 80 percent of domestic market.
Earlier this year, Tencent shares tumbled over 5 percent after a huge 11 percent rally the day before it pushed its estimate value to almost $1 trillion for the first time in the company’s history.
In a response to the SAMR’s recent regulations, Tencent and Tencent Music Entertainment said they will abide by the ruling comply with the requirements laid out by the regulator.
Mastercard, DTA partner up to release digital ID service In Australia
Multinational credit card company Mastercard announced on Monday a new collaboration with the Digital Transformation Agency (DTA) as it implements plans to create digital identities and age verification system, a move that will manifest the company as a leading digital identity service provider in Australia.
The Trusted Digital Identity Framework (TDIF) will be a unison maneuver that will put both Mastercard and the DTA under one umbrella. Both entities will investigate a chain of private sector-led pilots alongside the effects digital verification services could impose on the retailer and consumer comprehension and anticipations from online experiences.
Last year, a parliamentary committee introduced a recommendation inquiry setting the first step towards a safer online environment, aiming to prevent minors from accessing online pornography sites. This had a direct affiliation to the DTA’s objectives of becoming the country’s first federal government agency to obtain an online age verification system.
“Australians are increasingly expecting no disruptions between their online and physical lives, and identity is an area that must keep pace with those expectations,” Australia Mastercard President Richard Wormald said in a statement.
“Public-private pilots have the potential to make it easier to use these verified identities security, everywhere they travel,” Wormald added.
The framework’s initial announcement was revealed in December of last year, with three parties initiating the first steps to launch two trials.
The first trial mainly focused on the identity verification process of students’ registration and digital exams at a university campus, while the second trial conducted united Mastercard’s digital ID solution with an already existing verification process in collaboration with the postal services.
Through TDIF, users will have unlimited capacity to gain entry to any government services and benefit by adopting a reusable digital identity approach without the need to show official documentation every time.
In addition, the framework’s influence will reach third-party providers to obtain access to the system as well.
Even though the DTA is hastily working on the implementation plans for TDIF, digital privacy experts are warning of a hazardous downfall that could follow the trusted framework. Analysts warn Australian authorities from deeply indulging in a system that has not been supervised by tech experts and the community.
China’s Ant Group to share credit data with central bank
China’s central bank will soon have access to the private credit information of hundreds of millions of users of Ant Group’s online credit service, in a move signaling more regulatory oversight of the financial technology sector.
Huabei, Ant Group’s credit service, said in a statement that consumer credit data it has collected will be included in the People’s Bank of China’s financial credit information database.
“The inclusion of Huabei’s credit information into the credit reporting system will help users’ credit information be more comprehensive,” Huabei said.
Consumers who do not authorize the sharing of credit data with the central bank will not be able to use Huabei’s service.
The company did not give a timeline for when it would provide all of its customer credit data to the central bank.
The move is part of various stricter regulations for Ant, which has been ordered to end its monopoly on information and behave more like a bank.
Ant Group, the financial affiliate of e-commerce giant Alibaba, operates many digital payments, investment and insurance services and has over a billion users worldwide. In China, about 500 million people use its online credit and consumer loans services.
Financial regulators have grown increasingly concerned at Ant’s financial services business, abruptly halting its planned $34.5 billion listing days before its stock debut.
Previously, Ant Group’s private credit-scoring system would assess a user’s creditworthiness. Those deemed trustworthy enough could use Ant’s credit and loans services including Huabei, which was popular among consumers as it gave them access to online credit in a country where it is difficult to get a credit card.
Ant Group would connect creditworthy users with banks that provided the credit, while taking a cut of the fees in the process. Banks were thus left to shoulder most of the credit risk.
Ant’s trove of customer data has long been seen as an important advantage for the company, allowing it to design financial products to suit its users.
Regulators have accused the firm of anti-competitive behavior, defying regulatory compliance requirements and engaging in regulatory arbitrage. Ant Group was ordered to hold minimum capital requirements as part of risk management measures.
According to Huabei’s statement, data such as a user’s credit lines, amount of credit used, repayment statuses and account creation dates will be shared with the central bank, while information such as individual purchases and transactions will remain private.
Huabei said it would strictly follow the regulatory requirements.
“The credit reporting system is the foundation of the country’s financial sector. As society progresses and improves, more and more users will come into contact and better understand credit reporting,” it said.
Beijing’s aim to divide AliPay rocks Chinese tech stocks
Amidst Beijing’s latest regulatory wave to impose dominion on its tech sector, China’s Big Tech shares drastically dropped on Monday as the country’s watchdogs intend to break down Ant Group Co.’s Alipay, at a speed the U.S. and the European Union cannot fathom or dare to indulge in.
Following a Financial Times report stating that Beijing is planning on breaking up Ant Group’s Alipay and forcefully create independent loans apps, Alibaba shares plunged by 4.23 percent in New York Stock Exchange (NYSE) with a share valuation closing at $165.41, as of the time of writing, according to Nasdaq.
Alibaba’s drop in shares trickled down to a multitude of other Chinese tech stocks, with Tencent shares slipping by 2.45 percent clocking in a price of $61.43 per share, while Meituan shares plunged by 4.47 percent and closed its trading day with $63.75 per share as of the time of writing, according to Yahoo Finance.
Hang Seng Tech index shares fell by 2.27 percent, following a 22 percent drop in valuation so far, with 11 percent recovered from an August low.
Hang Seng represents 30 of the biggest technology hubs listed in the Hong Kong Stock Exchange (HKSE) with augmented business exposure to technological essence.
Other Chinese tech firms have been severely affected by the regulatory decision.
On Monday, the country’s industry and Information Technology Minister Xiao Yaqing announced that China is experiencing an overload of electric vehicle (EV) companies emphasizing the importance of establishing a union to enhance its charging network and providing EV sales in rural markets.
Following Yaqing’s statement, BYD Co. Ltd shares dropped by 2.14 percent at the Shenzhen Stock Exchange (SSE) and currently stands at $41.78 per share, while Xpeng Inc. shares plunged by 2.35 percent in the HKSE and closed at $32.90 per share as of the time of writing, according to Yahoo Finance.
Late Friday, the government released a statement identifying that majority of China’s tech firms have failed to comply with the state’s regulatory legislation by not ensuring appropriate working conditions and rights in income and labor safety to their gig economy workers.
The statement was a follow-up to a meeting conducted between four governmental agencies alongside ten major platform companies, including shopping platform Meituan, e-commerce giant Alibaba, and multinational technology conglomerate Tencent Holdings Ltd., partially state-owned internet tech company ByteDance, Baidu Inc., and smartphone vendors Xiaomi and Huawei.
“We firmly support the decision of the Ministry of Industry and Information Technology, and we will implement it in stages,” said Tencent.
As for the e-commerce titan, Alibaba demonstrated intentions of showing utter compliance with the ministry’s demands.
On a separate note, China is setting an adamant goal of detaching and dividing online payment platform Alipay to release individualistic apps for loan business. As for the implementation of the authority’s scheme, regulators have already set into motion the leading steps to divide the backend of its main entity from the remainder of its financial offering and introduce foreign shareholders.
“I believe the market is still finding the bottom valuation of Chinese internet stocks,” Asia’s chief investment officer for Private Banking and Wealth Management at HSBC Holdings Plc, stated Fan Cheuk Wan said on Bloomberg TV.
China’s watchdogs have already demanded that Ant. Group must divide its two leading divisions Huabei and Jeibei, as the government is seeking to give these businesses their private platforms.
The governmental plan also seeks to reinforce its loan decision to change Ant’s financial divisions to its latest, partly state-owned, disjointed credit scoring joint venture by forcing Alibaba’s financial affiliate company to relinquish its user data.
“The government believes that Big Tech’s monopoly comes from managing data. I want to end it,” said a source close to Beijing’s financial regulators.
Beijing’s complicated ripple of regulations and tactics to divide its tech firms to further establish its supremacy on its tech hubs seems to be overwhelming the sector’s lead players. These tactics could immensely affect the dynamic between the miscellany of the state’s tech companies while the government expands its reign on the tech sector. compendium
Google illustrations has just upped the tech giant’s game
Ford to add 10,800 jobs making electric vehicles, batteries
Far-right cryptocurrency follows ideology across borders
Mastercard, DTA partner up to release digital ID service In Australia
NEOM: A $500 Billion smart-city to be built in Saudi Arabia
5 Reasons Why… Telecoms is Important in Society
Advantages and drawbacks of Voice Recognition Technology
Telecom Sales Strategies that will Bring You Success in 2020
- Cryptocurrency4 weeks ago
Billionaire John Paulson bets against cryptocurrency’s climb
- Technology4 weeks ago
Microsoft’s Windows 11 launches on October 5 with explicit hardware list
- News3 weeks ago
Australian court rules media liable for Facebook comments
- Cybersecurity4 weeks ago
Biden’s Zero Trust order unites Big Tech under national security
- Ethical Tech4 weeks ago
Texas is one step closer from passing a law against tech giants
- MedTech3 weeks ago
TestCard launches at-home ‘Test and Treat’ UTI service
- Telecoms4 weeks ago
Deutsche Telekom and Vodafone’s zero tariff defies net neutrality
- Cybersecurity2 weeks ago
3 former US officials charged in UAE hacking scheme