China Cracks Down Upon Tencent, Other Tech Giants Over Algo Abuse; Questions Alibaba, Others To Address Job Cuts

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  • China looks to rein in the potential abuse of algorithms by internet giants from ByteDance Ltd to Tencent Holdings Ltd TCEHYBloomberg reports.
  • The Cyberspace Administration of China looks to inspect how social media platforms serve up ads and content to hook users, especially the large-scale websites, platforms, and products with significant influence.
  • China aims to implement the new rules governing the industry's use of algorithms to forbid online addiction and any activity endangering national security by China's most influential corporations.
  • Also Read: Tencent Caught In Regulatory Turmoil Like Jack Ma's Ant GroupAnother Analyst Cuts Price Target On Alibaba
  • The watchdog interviewed representatives from companies including Tencent, Alibaba Group Holding Ltd BABAMeituan MPNGF, and JD.com Inc JD to address job cuts totaling 216,800 from July to mid-March.
  • The companies hired 295,900 people over the same period, a net increase. 
  • Tencent doled out over $200 million apiece to two unidentified executives in 2021 while slashing founder Pony Ma's compensation for a year in which Beijing's crackdown sent Tencent's stock down by 19%.
  • Investors, which wiped out over $1 trillion of Chinese tech stock value at the height of the crackdown, remain cautious in 2022.
  • Companies including ByteDance and Tencent tweaked their products following the crackdown to protect personal privacy.
  • After Tencent decided to shut down its game streaming service, the Chinese tech stocks went jittery.
  • Price Action: BABA shares traded lower by 0.21% at $104.05 premarket on the last check Friday.
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