The Cyberspace Administration of China (CAC) announced it had banned 105 mobile apps for violating Chinese internet regulations. While almost all apps were created by Chinese developers, the American travel booking and review site TripAdvisor is also on the list.
TripAdvisor Shares fell following the announcement of the CAC on the Nasdaq, but rebounded after close of trading.
While TripAdvisor, like other overseas tech companies, is based in the US, it has partnered with a local tech company for its Chinese operations. In the case of TripAdvisor, an agreement was signed in November 2019 with Trip.com – the Nasdaq-listed Chinese travel titan formerly known as Ctrip – to operate a joint venture called TripAdvisor China. The deal made Trip.com subsidiary Ctrip Investment a majority shareholder in the joint venture, with TripAdvisor owning 40%.
Under the terms of the deal, TripAdvisor agreed to share content with Trip.com brands, including the Chinese travel platforms Ctrip and Qunar, which would gain access to the US travel company's numerous reviews. This put TripAdvisor in a race with regional players, including Qib, backed by Hong Kong's Alibaba and Klook, to attract China's increasingly wealthy and savvy outbound tourists.
The CAC is the government agency responsible for overseeing internet regulations and censorship. In a brief statement, the bureau said it took steps on November 5 to "clean up" China's Internet by removing non-regulatory apps. The 105 apps were the first group to be blocked and were targeted after users reported illegal activity or content, the agency said.
Although the CAC did not specify exactly what each app was banned for, the list of illegal activities included the distribution of pornography, incitement to violence or terrorism, fraud or gambling, and prostitution.
In addition, eight app stores were closed for failing to comply with vetting regulations or for allowing illegal content to be downloaded.
Such an “app cleanup” takes place regularly in China, where the government has the flow of information under control. Internet services in China, especially those with user-generated content, usually rely on armies of censors or filtering software to ensure their content complies with government guidelines.
The Chinese Internet is developing so fast that regulations sometimes lag behind those in the industry, with the result that authorities are constantly filling in loopholes. Apps and services could be accessed because regulators discover that they are missing essential regulatory approvals or because they have disclosed illegal or politically sensitive information.
Foreign technology companies operating in China often move between “Internet freedom”, which is celebrated in the West, and compliance with Beijing's requirements. Companies like Bing.com, LinkedIn, and Apple – the few remaining Western tech giants in China – have historically criticized China for indulging in censorship pressures.