Tencent executive under investigation for alleged ‘corruption’

The move comes as China cracks down on the sharing of sensitive consumer data

Zhang Feng, an executive at Chinese tech giant Tencent, is allegedly being investigated for sharing personal data.

Media reports claim he is under suspicion for passing on information to Sun Lijun, the former Deputy Minister of Public Security. China’s anti-graft agency has been investigating Sun since April, according to the Xinhua News Agency.

Still, the news that Zhang might be embroiled in allegations of “personal corruption” will send shockwaves through China’s technology industry.

In the past four months, Beijing has launched an unprecedented crackdown on big tech, tightening up anti-trust regulations and data privacy legislation.

The facts:

  • Data protection has become a hot issue with Beijing.
  • The years of a light regulatory touch appear to be over for tech juggernauts such as Tencent and Alibaba.
  • The ruling Communist Party has become increasingly worried that big tech is too powerful.
  • President Xi Jinping’s government is starting to roll out a raft of legislation to rein in the internet industry.

What was said: “We can confirm that [the Zhang] case relates to allegations of personal corruption and has no relation to Weixin or WeChat, [which are owned by Tencent],” a spokesman for Tencent said in an emailed statement as reported by Variety.

Reaction to the news: “This is just one more instance of Beijing entrenching control over the large and powerful tech giants. [It] seems like an extension of the previous anti-corruption campaign that was focused on the political structure,” Mio Kato, an analyst at LightSTream Research, told the Reuters news agency.

China Factor comment: Beijing is rushing through new anti-trust legislation that targets online big guns such as Alibaba and Tencent. The State Administration for Market Regulation has rolled out new anti-competitive regulations that will curb the sharing of sensitive consumer data and stop excessive price-cutting to squeeze out small competitors.