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Huawei and Tencent in standoff over user data

By Rita Liao

Huawei, the Chinese telecom equipment and smartphone maker, is in a dispute with Chinese social networking and gaming giant Tencent over the right to collect user data from Tencent’s popular app WeChat installed on Huawei phones, Wall Street Journal reported on August 3 (paywall).

This is not the first time Chinese tech giants have fought over data access. In June, Alibaba’s logistics arm Cainiao and China’s biggest private courier SF Express engaged in a month-long standoff over access to customer data.

According to WSJ, Huawei is seeking to collect data from users of its Honor Magic phone. With this data, Huawei will be able to beef up its AI-driven functions, for example, making restaurant recommendations based on a user’s text messages. Contention arose because Huawei’s data source will include users’ chat logs on WeChat.

The high-end phone Honor Magic, available in China only, has been marketed for its “smarter” and “futuristic” features including a face- and eye-tracking algorithm made possible by a front-facing infrared sensor.

According to people familiar with the matter, Tencent contends that Huawei has seized Tencent’s data and infringed on the privacy of WeChat users, and has asked the Chinese government to intervene. This is reminiscent of the Cainiao-SF dispute which was mediated and eventually resolved with help from China’s State Post Bureau.

In its statement to WSJ, Huawei denies that it is violating user privacy. The data belongs to the user, says Huawei, not Tencent or Honor Magic, and the data is collected only after gaining user authorization.

“There are no adequate laws and regulations to supervise and administrate China’s mobile industry,” says Peter Cui, a lawyer at a Beijing-based insurance firm. China recently passed a new cybersecurity law to protect internet user data, but the specific provisions have yet to be defined. Chinese users also lack an awareness of the importance of personal privacy, Cui reckons. “Thus, under the regulatory and social environment, any discussion of privacy protection has no teeth.”

Both companies are headquartered in Shenzhen and command leading positions in their own industry. Huawei, an employee-owned company ranked 83rd in the latest Global Fortune 500 List, is now the world’s largest telecom equipment maker. Hong Kong-listed Tencent owns China’s largest social networking service WeChat with 938 million MAU—over 90% of China’s smartphone users—as of Q1 2017.

Source:: Huawei and Tencent in standoff over user data

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