The internet regulator in China, Cyberspace Administration of China, has revealed that three of the biggest social media platforms in the country have been slapped with fines for hosting banned content that includes pornography and fake news. Alibaba Group Holding Ltd (NYSE:BABA), Baidu Inc (ADR) (NASDAQ:BIDU) and Tencent are the three companies which were hit with the fines since they own the platforms in part or in whole. The internet regulator did not, however, reveal the amounts the social media platforms were forced to pay.
According to the cybersecurity law in China, network operators stand to be fined a maximum of $75,000 for failure to stop banned content from being transmitted. They can also have their business licenses cancelled or operations suspended. The fines come after formal investigations were launched last year in August following a preliminary probe which found that users of these platforms had been sharing and propagating content that, according to regulators, threatened public order and national security.
Illegal content
Per the internet regulator the WeChat app that belongs to Tencent failed because it did not ensure that its users were abiding by the law by not posting illegal content. Baidu’s Teiba message platform was, on the other hand, also found guilty of failing to prevent its users from spreading fake news. Weibo, a microblogging platform partly owned by online retail giant Alibaba, was also accused of failing to stop the sharing and propagation of fake news. Both Baidu and Tencent have apologized to users and vowed to introduce fixes.
The fines are, however, unlikely to have a significant impact on the finances of the three internet giants. Revenues for Weibo in 2016 were $656 million while those of Baidu were $10.2 billion. Tencent on the other hand managed revenues of $21.9 billion last year.
Pocket change
“I don’t see the punishment as terrible hits to the companies’ core business, but the move has brought extra challenges to these platforms – how to strike a good balance between boosting users and supervising information,” said Shanghai Academy of Social Science Internet Research Center's researcher, Li Yi.
On Tuesday shares of Alibaba Group Holding fell by 1.52% to close the day at $167.02.
