(Bloomberg) -- China is considering asking media companies from Tencent Holdings Ltd. to ByteDance Ltd. to let rivals access and display their content in search results, a move that could further eradicate online barriers and shake up the internet advertising arena.
The Ministry of Industry and Information Technology is debating rules to make hundreds of millions of articles on Tencent’s WeChat messaging app available via search engines like Baidu Inc.’s, people familiar with the matter said. It’s also considering making short videos from ByteDance’s Douyin -- TikTok’s Chinese cousin -- show up in searches, one of the people said. Regulators are polling companies for feedback and it’s unclear whether they will go ahead, they said, asking to not be identified discussing private information.
If implemented, the policy decision would mark a significant advance in Beijing’s campaign to break down barriers among China’s internet giants, especially Tencent and Alibaba Group Holding Ltd. The watchdog has already warned tech companies to open their so-called “walled gardens” by allowing links to rival services, part of a broader push to root out illegal activity across the world’s largest internet arena.
Forcing ByteDance or Tencent to allow Baidu and other rivals to display their social media content in internet searches would be unprecedented. It could divert advertising revenue away from services like WeChat or Douyin toward search engines such as Baidu. The process would be tantamount to U.S. regulators requiring Facebook Inc. to open up public posts on Whatsapp to Google searches, for instance, if the U.S. messaging service supported public-facing accounts.
Baidu climbed as much as 4.3% in the afternoon in Hong Kong. A Tencent spokesperson declined to comment, while representatives for ByteDance and Baidu didn’t respond to requests for comment. The MIIT didn’t respond to a faxed request for comment.
Beijing has declared war on closed ecosystems operated by its biggest corporations, part of a campaign to curb their power. It accuses a handful of companies of employing blocking and other methods to protect their respective spheres: Tencent in social media via WeChat, Alibaba in e-commerce with Taobao and Tmall and, more recently, ByteDance in video and news via Douyin and Toutiao.
The walls are now coming down -- slowly. Tencent last month allowed WeChat users to link to things like Douyin videos and Taobao stores in one-on-one messaging for the first time in years, while Alibaba added WeChat’s payment system to some of its apps.
There’s no guarantee that the MIIT will proceed with the envisioned regulations, given its area of coverage overlaps with other powerful agencies such as the Cyberspace Administration of China and the State Administration of Market Regulation, which extracted billions in fines from Alibaba and Meituan for market abuse. All are under pressure to heed Xi Jinping’s call to clean up the internet, get the biggest players to share the wealth and help mold a generation of productive youths by fighting online addiction.
Xiao Yaqing, the MIIT’s head, told the state-backed People’s Daily in an interview his ministry will strengthen supervision of the internet industry as it pursues a six-month cleanup campaign. The agency has been the primary driver in the broader effort to root out online monopolies around content, while the CAC has focused on security and privacy issues.
The ministry’s deliberations currently center on WeChat’s public accounts, which let individuals and businesses publish articles on everything from films to football and foreign policy. That massive content library is now blocked from search engines operated by the likes of Baidu and ByteDance. Articles on WeChat now surface only on the app’s native search function or on smaller engine Sogou, controlled by Tencent.
To compete, Baidu launched its own publishers’ platform Baijiahao in 2016, filling in content so its core search service is still relevant in the mobile era.
Tencent isn’t alone in restraining search services. In 2008, Alibaba’s eBay-like Taobao mall blocked Baidu searches in a move it said was intended to protect consumers. That’s helped Alibaba dominate online marketing, as merchants cut down their ad spending with Baidu to focus on online shopping. It’s unclear if the MIIT also intends to unblock Taobao listings or other content, the people said.
(Updates with Baidu’s climb from the fifth paragraph)
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