China’s internet watchdog says it has not issued a policy requiring vetting of investment deals at Big Tech firms

The official denial came after reports circulated online that platforms with at least 100 million users would have to seek approval for external investment deals

Different government agencies, with varying priorities and authority, are becoming increasingly visible in regulating the country’s Big Tech companies

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A decision by ByteDance to dissolve its strategic investment unit has lent support to concerns that Beijing wants a say in deals made by the country’s largest internet firms. Photo: Shutterstock Images

Published: 8:00pm, 20 Jan 2022Updated: 8:02pm, 21 Jan 2022

China’s powerful internet watchdog has denied it has issued guidelines for vetting major investment deals by the country’s largest internet firms, after a screenshot of discussions about such a policy was shared on social media.

The Cyberspace Administration of China (CAC) said in a statement on Wednesday that it has never issued a policy requiring internet platforms to seek pre-approval for external investment deals.

Multiple sources who spoke on condition of anonymity to the South China Morning Post said the CAC has a mandate to enhance its supervision of internet firms, and that the agency is exploring how to perform its new role in an effective way.

The agency has to seek consent from other regulators, discuss the matter with internet firms, and publish a draft to seek public feedback, according to one source.

This source cited as example the China Securities Regulatory Commission, which may not like the idea of forcing tech companies to surrender investment decision power.

The official CAC statement came after reports circulated online that internet platforms with at least 100 million users would have to seek approval from the cyberspace regulator for such deals.

The recent decision by ByteDance, owner of TikTok and its sister Chinese app Douyin, to dissolve its strategic investment unit has lent support to concerns that Beijing is working on a plan to undermine the investment decision-making power at the country’s largest internet firms.

ByteDance said in a brief statement on Wednesday that its decision to disband the strategic investment unit was part of an internal reorganisation, without referring to government policy.