Tencent Holdings Limited 16%

http://tencent.com

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Tencent Holdings Limited provides a broad range of Internet and mobile value-added services (VAS), online advertising services, and eCommerce transactions services to users in China, the United States, Europe, and elsewhere around the world. It is one of the largest Internet companies globally.

Company Statistics

IndustryInternet Software and Services

DomicileChina

Market CapUSD 176,038 million

Stock SymbolSEHK: 700

Services evaluated:

  • QZone (social network)
  • QQ (instant messaging)
  • WeChat (mobile messaging/calling)

Analysis

OVERALL SCORE – 16%

Tencent’s score was second lowest among Internet companies examined, and it ties for third lowest in the Index overall. Tencent’s performance in the Index was heavily affected by the laws, regulations, and policies of its home country government. China is rated “Not Free” in Freedom House’s 2015 “Freedom on the Net” Index. The country holds Internet companies strictly liable for users’ activities. Companies are required to monitor and police user behavior and work closely with police and national security authorities, largely without judicial oversight or avenues for legal remedy. State secrets laws prevent companies from being transparent about the nature and volume of government requests to restrict content or hand over user data, let alone provide detail about company policies and practices for handling such requests.

Even in the current legal and regulatory environment, Tencent can take concrete steps to improve its commitment to and respect for users’ rights.

COMMITMENT – 8%

Tencent scored second to last among Internet companies, and fourth from last overall in the Index, on commitments to users’ freedom of expression and privacy. It received some credit on policy and leadership commitment (C1) due to statements regarding company commitments to user privacy. However, the company lacks similar commitments in support of freedom of expression. The company also received a few points for grievance and remedy mechanisms (C6) because it offers a contact point to report infringement of rights including “civil rights.” But information about this contact point is only found in the terms of service directed at international users residing outside of mainland China – and not in the version governing users in the home market.

The company should offer the same level of respect for mainland Chinese users’ rights as it offers to its international users.

FREEDOM OF EXPRESSION – 19%

Tencent was the lowest-scoring Internet company on Freedom of Expression, and the second lowest-scoring company on this category in the Index overall. The company received points on three indicators in this category: the availability of terms of service (F1), reasons for content restriction (F3), and reasons for account or service restriction (F4).

Transparency about requests for content restriction and enforcement of terms of service: The company does not publicly commit to notify users when it restricts access to their accounts, removes content posted by users, or blocks messages transmitted by users (F5). However, our researchers did find anecdotal evidence that users receive notifications with the message: “This content has been reported on by many users; you cannot view the relevant content.” The company’s public commitments or policy disclosures do not support such anecdotal evidence; consequently the company received no score on this indicator.

While state secrets laws make it unrealistic to expect greater company transparency about Chinese government requests, the company could make efforts to disclose requests made by other governments in markets where it serves significant numbers of users. In all markets, it would be reasonable for users to expect greater transparency about private requests and terms of service enforcement, to the maximum extent possible under the law.

PRIVACY – 17%

Tencent was the second-lowest scoring Internet company on privacy-related disclosures, although it placed ahead of three telecommunications companies. Tencent does have a publicly accessible and reasonably clear company-wide privacy policy (P1). When it comes to providing notice and record of changes to its privacy policies (P2) Tencent’s disclosures are similar or even greater than several companies whose overall scores in the Index were much higher.

Handling of user information: Tencent received scores on three other indicators in the Privacy category. On disclosures about collection of user information (P3), it received the same overall score as Google, Microsoft, Twitter, and Vodafone and was surpassed only by Kakao and Facebook. On disclosures about the sharing of user information with third parties (P4), its score was the same as AT&T and Facebook, surpassed only by Kakao and Yahoo. However, the company should make efforts to enable all users – in mainland China as well as externally – to view the information that the company holds about them (P6).

Transparency about requests for user data: The company discloses no information related to its policies and practices for handling third-party requests for user data.

Security: Tencent also received some credit on indicator P14, which focuses on user education about cyber threats. The company’s messaging service QQ has an online “security center” with tips about account protection that include cartoons and graphics. The company should make efforts to improve security practices and provide such materials for all of its services.

Indicator Results