DJ China's Tencent Says It Will Make It Easier to Share Links to Rivals on WeChat

By Keith Zhai

Tencent Holdings Ltd. said it would gradually remove some competitive barriers from its WeChat service, including making it easier for users to share e-commerce listings from major rival Alibaba Group Holding Ltd. on the messaging app.

The change came after Beijing made it clear this week that companies must stop blocking links leading to rivals' services on their apps, part of authorities' efforts to curb the power of Chinese consumer giants by tearing down the virtual curbs they have built in recent years. The Wall Street Journal reported in July that the Chinese government told both Tencent and Alibaba to open up their services to one another.

China's consumer internet has largely split into two camps built around the archrivals. For example, Tencent's WeChat app, which has around one billion active accounts, doesn't allow users to share links for Alibaba's Taobao merchandise or ByteDance Ltd.'s short-video platform Douyin. Customers also can't use Tencent's payment system to buy goods on an Alibaba platform.

Tencent said in its statement Friday that users can access external links in the one-to-one conversations as long as the links comply with government rules and other regulations. The company didn't specify the type of links that can be shared on its WeChat app, but some users said they can now share links for goods on Taobao and videos from Douyin, the sister app to TikTok in China.

The move marks the beginning for Chinese technology companies to open up to their rivals' services. Alibaba could introduce Tencent's WeChat Pay to Alibaba's e-commerce marketplaces, Taobao and Tmall, people familiar with the discussions told the Journal in July.

Other companies could be affected as well. For example, JD.com's online-shopping platform doesn't accept Alipay, a popular payment app run by Alibaba's financial affiliate Ant Group Co.

Letting users share external links to rivals in one-to-one chat still represents only a limited opening as many Chinese users would prefer to share with groups. The company said external links still won't be possible in group chats, but Tencent is developing functions to make it "convenient for users to choose personal" settings.

Tencent President Martin Lau said in the company's earnings call last month that the company is being "very cautious" in opening its services to other companies' platforms because of complications such as different platforms charging different fees from merchants.

"It's not the most important priority for our mission," said Mr. Lau, adding that the issue needs to be discussed and resolved over time.

During the past few months, Chinese regulators have intensified scrutiny of domestic internet companies for possible antitrust violations. In April, China imposed a record $2.8 billion fine on Alibaba in an antitrust probe. The authorities are also preparing to impose a roughly $1 billion fine on food-delivery giant Meituan for allegedly abusing its dominant market position to the detriment of merchants and rivals.

--Xiao Xiao contributed to this article.

Write to Keith Zhai at keith.zhai@wsj.com

(END) Dow Jones Newswires

September 17, 2021 08:57 ET (12:57 GMT)

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