China Targets Mobile Pop-Ups in Latest Tech Crackdown

(Bloomberg) — China ordered Tencent Holdings Ltd. and 13 other developers to fix problems related to pop-ups within their apps, expanding a wide-ranging crackdown on the country’s tech sector.

The companies must address “harassing” pop-up windows, which could contain misleading information or divert users away from the apps, the Ministry of Industry and Information Technology (MIIT) said Wednesday in a statement (link in Chinese). The 14 services, including an e-books app by Tencent’s QQ and a video platform by Le.com, must fix the problems by Aug. 3.

Failure to abide by regulations will not be tolerated and will be penalized accordingly, the ministry said.

Pop-ups, often used for advertising, are just the latest targets in a series of government crackdowns that have ranged from antitrust to data security as Beijing seeks to rein in the tech giants’ influence over most of everyday life. The campaign shifted into high gear in recent days after regulators imposed the toughest-ever curbs on the online education sector and issued edicts governing food delivery, fueling a rout in Chinese tech stocks.

Days earlier, the MIIT announced a six-month crackdown on illegal online activities. The ministry said Monday it will take steps to root out violations involving pop-ups, data collection and storage as well as the blocking of external links.

Other regulators including the Cyberspace Administration of China have also pledged to tighten restrictions on misleading and explicit content used for marketing purposes. The watchdog said such material will be subject to stricter oversight, issuing fines against companies like Tencent, Kuaishou Technology and Alibaba Group Holding Ltd. for offensive content.

Tencent shares sank more than 5% Wednesday, extending a three-day, 18% slide. The company, China’s biggest by market value, suspended registrations Tuesday for its WeChat services to correct illegal behavior online.

The moves to address pop-up ads and other misleading marketing content may extend beyond games and force Tencent, Alibaba and competitors to increase compliance costs to weed out misleading content. This could hurt profitability as such efforts are introduced, similar to the drop in margins Facebook experienced when it ramped up content moderation in 2019, said Matthew Kanterman, senior analyst at Bloomberg Intelligence.

Contact editor Bob Simison (bobsimison@caixin.com)

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