For the time being, Tencent is no longer taking on new WeChat users while it undergoes technical upgrades that will adhere to new security mandates handed down by the Chinese government, the Financial Times reported on Tuesday (July 27).
The temporary suspension of service for new registrants of its messaging service is necessary to ensure that Tencent’s flagship social network can do what is required to comply with the new laws.
“In the meantime, the registration of new WeChat personal accounts and public accounts will be temporarily suspended,” the company said, according to a CNN report. WeChat added that new registrations will open up following the upgrade, which is anticipated to happen in August.
WeChat is China’s most popular messaging app, and is used to text friends, send photos, make restaurant reservations, order takeout and more. Combined users of the app in the U.S. and China number roughly 1.2 billion, CNN reported. The app is called Weixin in China.
News of the fresh user ban triggered a drop in technology stocks in China for the third day in the row, as regulators continue to step up probes and institute rules that have sent investors running.
Regulators in China have been flexing their authority and cracking down on domestic Big Tech companies that list on stock exchanges in other countries. The Cyberspace Administration of China earlier this month demanded that app store operators remove the ride-hailing app Didi from stores. Didi, which is under an onsite cybersecurity review, could face fines and a delisting from the NYSE.
Earlier this month, China’s State Administration for Market Regulation (SAMR) also found that Tencent currently has a 40 percent hold on the digital gaming market, and blocked the merger of the company with video game streaming sites DouYu and Huya. DouYu and Huya have 70 percent of the online gaming market.
Beijing’s heavy hand has prompted Alibaba and Tencent to mull a strategic collaboration that would combine their strengths.