Source | SourceSight

The anti-corruption saga within major internet companies continues to unfold.

On January 16, 'Sunshine Tencent' released its 2024 anti-fraud announcement. The report reveals that over the past year, Tencent's Anti-Fraud Investigation Department uncovered and handled over a hundred cases of violating 'Tencent's high-pressure line,' resulting in the dismissal of over a hundred individuals, with more than twenty being transferred to public security organs for suspected criminal activities. Additionally, 35 merchants were blacklisted for future cooperation.

Tencent is not alone in its recent anti-corruption reports. From the investigation of senior executives at NetEase Games in November last year to the regular anti-corruption announcements by giants like ByteDance, Meituan, and Baidu, big internet companies have increasingly emphasized internal anti-corruption efforts in recent years.

This trend underscores not only the existence of loopholes in the rapidly evolving internet industry but also reflects a growing intolerance towards corruption as the industry nears its saturation point.

01

IEG Emerges as a 'Hotbed of Corruption'

According to Tencent's announcement, among the over 20 cases disclosed this time, the primary departments involved include PCG (Platform and Content Group), IEG (Interactive Entertainment Group), CSIG (Cloud and Smart Industries Group), and WXG (WeChat Group).

IEG stands out as a key focus, with nine corruption cases exposed. For instance, Ma Xiaomin from IEG's TiMi Studio exploited her position to benefit external companies, receiving kickbacks and falsifying project costs to embezzle company assets. She was transferred to public security organs for suspected criminal activities. Similarly, Zhang Xu from the same studio illegally resold company assets for profit and faced similar legal consequences.

Pony Ma recently praised IEG in a speech at Tencent's 2024 Annual Employee Conference. He noted that IEG had made 'very impressive' progress in both domestic and international markets, showing long-term sustainability and resilience. 'The entire organizational structure and morale have improved significantly.'

PCG, previously a key anti-corruption target, saw a decrease in disclosed cases this time, with only three reported.

After adjustments and optimizations, PCG turned profitable in 2023. During the conference, Pony Ma highlighted the profitability of some PCG departments, particularly short videos, which he believed were developing well. He also mentioned plans to invest in short dramas and praised products like QQ Browser and Tencent News for achieving profitability in 2024.

CSIG, driving Tencent's transition to ToB business, has also been a target of anti-corruption efforts. In 2024, CSIG disclosed seven corruption cases.

Pony Ma commended CSIG's performance, stating, 'Some To B businesses are already close to profitability. I expect them to achieve profitability in 2025, and this progress may be better than expected.'

'Sunshine Tencent' is the official account of Tencent Group's Anti-Fraud Investigation Department, which has consistently released anti-fraud announcements since 2019.

Public data shows that from 2021 to 2023, Tencent dismissed and transferred to public security organs 70+ and 10+, 100+ and 16, and 120+ and nearly 20 individuals, respectively. The number of transfers to public security organs increased in 2024.

02

The Anti-Corruption Storm Gathers Momentum

As competition intensifies in the internet industry, big internet companies are placing greater emphasis on anti-corruption.

Last March, Douyin released its 2023 Group anti-fraud announcement, investigating and handling 177 violation cases, with 23 individuals transferred to judicial organs for suspected crimes.

In the 'Douyin Group Anti-Fraud Announcement for the First Half of 2024,' another eight cases were transferred to the judiciary, mostly involving employees seeking improper benefits for external influencers or service providers and receiving substantial kickbacks.

In November last year, NetEase Games drew attention due to internal corruption issues. According to internal emails, several departments and senior executives, including the Interactive Entertainment Channel Distribution Center, were implicated in fraud and corruption, leading to the permanent blacklisting of 27 companies.

Meituan also disclosed that in 2023, it assisted public security organs in filing and investigating 93 cases involving suspected criminal activities by internal and external personnel. Seven of these cases involved fraudulent and corrupt behavior in procurement links such as fresh produce, snack foods, and warehouse renovations, affecting multiple business departments like Meituan Select, Xiaoxiang Supermarket, Meituan Flash, and Meituan Hotel.

The heightened anti-corruption efforts of big internet companies may indicate that, despite rapid growth, relevant companies had overlooked systemic and management flaws in the past.

A source close to a game giant revealed to SourceSight that the company had significant expenses for user acquisition and marketing but lacked refined management, with one employee once overseeing a budget exceeding a hundred million yuan.

As the industry nears its ceiling, giants are now focusing on addressing these issues. With cost reduction and efficiency enhancement becoming the industry's main themes, companies are strengthening internal anti-corruption efforts through the establishment of anti-corruption departments, hiring professional inspectors, and utilizing technological means.

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