Tencent will create an independent oversight body to protect its users’ private data, the first of China’s major tech companies to create a board of this kind. Meanwhile, the Personal Information Protection Law (PIPL) will take effect on November 1, reshaping how businesses mine and maintain the data of their users and customers.
The board will function as a third-party supervisor and examine whether Tencent’s services and products are in compliance with the PIPL. Its 15 members—tech experts, lawyers, media industry professionals, and representatives chosen from the general public—will advise Tencent on issues related to safeguarding the integrity of personal data, according to its announcement on WeChat last Friday.
The PIPL says that large internet platforms are obligated to establish an independent body that is composed of external members to supervise compliance with the law.
Other internet conglomerates, including Alibaba, JD.com, and ByteDance, haven’t shared similar plans so far, but they have made several announcements in late July, where each company listed the changes they have implemented to improve data protection in their platforms.
Data privacy and protection has become a major topic of interest in China, and securing user data is an important step to retain consumer confidence in platforms that have become everyday tools for many people.
In July, Didi was removed from app stores in China following its USD 4.4 million IPO on the New York Stock Exchange. The Chinese government cited concerns that the ride-hailing giant might share sensitive data with foreign entities. Alibaba’s fintech affiliate, Ant Group, is also under pressure to share its massive data trove with state-backed credit-scoring firms.
Tencent was heavily criticized in state media reports last week due to its stake in Futu, a US-listed company that runs Futu Securities, a China-based online brokerage service. People’s Daily published an article on October 14, saying that apps like Futu and Xiaomi-backed Tiger Securities pose risks to Chinese users’ data privacy. The author of the article suggested that the companies may provide information to the US Securities and Exchange Commission if a demand is made.
China’s private firms are not allowed to share any personal data with foreign entities without permission from regulators, according to the PIPL. Online trading platforms providing international brokerage services to Chinese investors now face legal and compliance risks, People’s Daily said. The share prices of Futu and Tiger plunged by 12% and 21%, respectively, on Thursday after the companies said they would comply with China’s data privacy laws and relevant regulations.
China’s securities watchdog is now formulating a slew of new rules to oversee app-based retail investments in the public markets, Securities Times reported. Regulators will continue to scrutinize the internet sector, the minister of industry and information technology said in an interview on Sunday.