Alibaba, Tencent back Chinese cyber law facing overseas critics

November 17, 2016 9:27 AM EST

A sign of Alibaba Group is seen at CES (Consumer Electronics Show) Asia 2016 in Shanghai, China, May 12, 2016. REUTERS/Aly Song/File Photo


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By Catherine Cadell

WUZHEN, China (Reuters) - China's Alibaba Group Holding Ltd (NYSE: BABA) and Tencent Holdings Ltd <0700.HK> rallied behind Beijing's recently-imposed cyber security law on Thursday, following criticism of it from overseas technology rivals.

The country's two tech giants also urged closer cooperation between the public and private sectors at China's third World Internet Conference, which has focused on heightened threats to cyber security over the past year, including disruptions to financial systems and online terrorist radicalization.

China says the new law, which formalizes broad restrictions on technology companies working in China, was designed to remove cyber security threats in "critical" industries not to target foreign businesses and will help counter terrorism.

However, overseas business groups and technology organizations say it unfairly targets them with overzealous surveillance measures and local data storage requirements.

Analysts say Alibaba and Tencent operate websites and apps that have a largely local user base, and so face fewer changes in the way they store data as a result of the law.

"This marks a step forward for China. We are asking [Tencent] professionals to learn from these regulations," Yang Peng, director of Tencent's Executive Committee for Information Security, said at the conference, which is organized by China's internet regulator and has also focused on building more robust global governance and the responsibility of the media.

CYBER CLEANSING

Critics of the cyber security law say while China's influence in global technology has grown, its ruling Communist Party led by Xi has presided over broader and more vigorous efforts to control, and often censor, information online.

Alibaba's Vice President Yu Weimin said the group has 3,000 people dedicated to security, and the e-commerce giant is "working with law enforcement" to crack down on some content.

"With all this technology together we can win the war on terrorism," Yu said.

Tencent's Yang said the company is working within state regulations to clean up content, and has removed 80,000 video clips from their site this year.

Cyber security took on a greater focus among regulators worldwide in February when it emerged that hackers stole $81 million from the Central Bank of Bangladesh [BDCB.UL] via SWIFT, the global financial messaging system. The funds were transferred to accounts in the Philippines and Sri Lanka.

Both Tencent and Alibaba operate online payment platforms that offer services ranging from bill payments to money transfers. Alibaba's Alipay dominates the online payments industry in China, while Tencent's WeChat payment system is increasingly popular.

"Big internet companies are the ones with the means to fight cyber terrorism, which is why we need more cooperation between the private and public sector," Alibaba's Yu said.

(Editing by Ryan Woo and Alexander Smith)



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