Ma Huateng and Zhang Yiming are two of China’s most recognisable and successful CEOs in the tech sector and are butting heads in an online spat that has now escalated to legal action.
“Pony Ma” Huateng, as he is known in China, runs the internet giant Tencent Holdings. Zhang Yiming is the head of ByteDance, which is most well-known for its news and information machine learning platform, Toutiao. However, it was another one of Zhang’s platform’s that caused him to fire shots at his Tencent counterpart.
Tencent is the internet company behind WeChat, a Chinese multi-purpose platform whose app provides users with a messaging service, social media platform and a mobile payment function. It hit 1 billion users in March 2018.
ByteDance’s Douyin (known as TikTok outside of China) video platform is blocked by WeChat, and Zhang has accused Tencent’s equivalent, Weishi, of “copying and plagiarising” the concept. Ironically, he made the statement in a post on his WeChat account.
Duoyin is extremely popular and was the most downloaded iOS app worldwide on Apple’s App Store in the first quarter of 2018, with more than 45 million installations according to a report from US research firm Sensor Tower Store Intelligence. It beat Youtube, WhatsApp, Facebook Messenger and Instagram.
Ma is not usually one to get embroiled in these sorts of discussions, so it came as a surprise to many when he responded, saying Zhang’s comments “could be understood as slander”. The problem is that WeChat provides tech start-ups with such an important and immediate way to reach users. If a product is not allowed to operate on its platform, the company won’t be able to reach a huge number of potential users.
Tencent blocked its messenger apps, WeChat and QQ, from sharing links to a number of video sharing platforms (including its own Weishi) after government regulators deemed a lot of the content to be inappropriate. It is an interesting turn of events because, shortly before he instigated this war of words, Zhang stuck up for Ma and Tencent, saying they were “an extremely excellent company” after an essay was released questioning the tech behemoth’s creative mojo.
Things took another turn for the worse on Friday, the 1st of June, when both companies filed lawsuits against one another. Tencent is suing ByteDance for defamation, and Bytedance is suing Tencent for anti-competitive behaviour. What’s even more interesting is the amount these rivals are suing each other for. Tencent seeks one yuan (about $0.15) in compensation in what is clearly a token gesture, whereas ByteDance is seeking 90 million yuan (about $14 million) from Tencent as well as an end to the anti-competitive behaviour and a public apology.
It is unimaginable that either figure really wants to push forward with the suits, but it will be interesting to see how things develop between the pair in the coming months.
Douyin is one of few companies that isn’t backed by China’s big three tech conglomerates of Baidu, Alibaba or Tencent (BAT). Competition in China’s internet space is clearly ruthless, and by cutting off rivals’ avenues to customers, Tencent is looking to consolidate the market. It’s the kind of trouble Uber ran into when they attempted to expand into China’s market and were roadblocked by Jean Liu and DiDi, except this is restricting the growth of an already huge local rival whose roots were grown in China.