iQiyi and Tencent’s WeTV, two of China’s most popular streaming services, may be barred from operating in Taiwan next month as the government prepares to close regulatory loopholes that enabled them to offer local versions of their services through partnerships. But iQiyi and WeTV will still be accessible if subscribers are willing to, for example, use cross-border payment services to pay for subscriptions in China and deal with slower connections.
In an announcement posted this week, Taiwan’s Ministry of Economic Affairs said Taiwanese companies and individuals will be prohibited from providing services for OTT firms based in mainland China. The proposed regulation will be open to public comment for two weeks before it takes effect on Sept. 3.
Though Taiwan, which has a population of about 24 million people, is self-governed, the Chinese government claims it as a territory. The proposed regulations means Taiwan is joining other countries, including India and the United States, in taking a harsher stance against Chinese tech companies.
iQiyi and Tencent’s WeTV set up operations in Taiwan through “illegal” partnerships, the Ministry of Economic Affairs said in its announcement, working through their Hong Kong subsidiaries to strike agreements with Taiwanese companies.
In April, the NCC declared that mainland Chinese OTT firms are not allowed to operate in Taiwan under the Act Governing Relations between People of the Taiwan Area and the Mainland Area. Cabinet spokesperson Kolas Yotaka said at the time that Chinese firms and their Taiwanese partners were operating at “the edges of the law.”
But NCC spokesperson Wong Po-Tsung said the proposed regulation isn’t targeted solely at Chinese OTT operators. According to the Taipei Times, he stated “the act was necessary because the cable television service operators have asked that the commission apply across-the-board standards to regulate all audiovisual service platforms, which should include OTT services. It was not stipulated just to address the problems caused by iQiyi and other Chinese OTT operators.”
Wong added that Taiwan is a democratic country and its government would not block people from watching content from iQiyi and other Chinese streaming services.
Once the act is passed, Taiwanese companies that break it will face fines of NTD $50,000 to NTD $5 million [about USD $1,700 to USD $170,000].
In a statement to TechCrunch, a spokeperson from iQiyi International, an iQiyi subsidiary based in Singapore, said it is playing close attention to the draft bill.
“China’s mainland entities have always been allowed to carry out commercial activities in the Taiwan region since the enactment of the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area,” she added. “As streaming services are not classified as ‘special industries’ under the Act, such services should not become the specific target of legislation.”
TechCrunch has also contacted Tencent for comment.
