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China Targets Social Media Giants Over Rumors

Beijing (August 12, 2017): Some of China’s biggest tech companies are in trouble with the country’s powerful internet regulator over activity on their social media platforms.

The Cyberspace Administration of China said it’s investigating Tencent, the owner of the country’s biggest messaging app; Baidu, the dominant Chinese search engine; and Weibo, the leading Twitter-like microblog service.

Shares of Tencent (TCEHY), a $380 billion company, plunged nearly 5% in Hong Kong after the announcement Friday. Baidu (BIDU, Tech30) and Weibo (WB) are listed in the U.S.

Users of Weibo, Tencent’s WeChat and Baidu’s Tieba are believed to have “spread information of violence and terror, false rumors and other information that jeopardizes national security, public safety and social order,” the internet regulator said in a statement.

That means the companies are suspected of violating the country’s strict cybersecurity rules. “They did not fulfill duties to manage illegal information uploaded by their users,” the statement said.

Spokespeople for Tencent, Baidu and Weibo didn’t immediately respond to requests for comment.

While big American social media platforms like Facebook (FB, Tech30) and Twitter (TWTR, Tech30) are shut out of China’s huge market, the investigation shows the challenges domestic firms face in authoritarian China.

The probe is the latest in a series of recent moves by Beijing to tighten its control of online information.

The government runs a huge apparatus of internet filters known as the Great Firewall, which it uses to censor content that it deems harmful. This year, it has cracked down on tools that enable users to skirt the defenses.

Censors also aggressively police what users share on social media, blocking and deleting posts that mention sensitive terms. People who cross the line can face suspension of their accounts or even arrest.

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