SNS Real Names: Crackdown Ahead? 社交媒体未“实名” 或面临更严厉监管

I read with amusement this morning a report stating that Baihe, one of China’s smaller social networking sites, is still letting people register under any name they choose, even though Beijing rolled out a controversial “real name registration” system months ago designed to curtail rumor mongering. The report, which looks credible, reflects the very real fact that such real name registration has been difficult if not impossible for not only Baihe but also much bigger names like Sina (Nasdaq: SINA) and Tencent (HKEx: 700) posing a very real risk for these Internet titans if and when Beijing decides to enforce the real name rule, or even worse, to punish companies that have failed to comply.

Let’s take a look quickly at the actual news, which saw a reporter at the Shanghai-based Oriental Morning Post recently open a Baihe account under a fake name even though the company previously claimed that all of its users had registered with their real names after Beijing imposed its real name rule and ordered everyone to comply by March. (English article; previous post) Beijing first announced the rule around the beginning of this year as part of a bid to clean up an increasingly unruly Internet sector where rumors were easily spread over microblogging services operated by Sina, Tencent and others, and through more traditional social networking services (SNS) like those operated by Kaixin and Renren (NYSE: RENN).

It was clear from the start that such real-name registration rules would be extremely difficult to implement for most sites, especially ones like Sina’s hugely popular Weibo service that boasted more than 300 million registered users. Various reports emerged in the run-up to the March deadline that the companies were nowhere close to registering all their users by their real names, and I personally don’t recall any major players officially announcing they had met the requirement.

I suspect that less than 50 percent of current users on all the major sites have registered with their real names, and that site operators continue to let everyone post messages and other materials under their accounts, regardless of whether they have registered with their real name. Sina took an interesting approach a couple of months ago when it introduced a ratings system for each of its users, rewarding people who posted credible material and punishing those who spread rumors. (previous post) Under that system, everyone received a rating of 1 to 10, with 10 indicating someone who is completely reliable while 1 was just the opposite.

I previously applauded this effort by Sina for its proactive nature, since I suspect that regulators in Beijing, fully aware that most SNS sites haven’t fully implemented the real name requirement, may quietly be considering their next move. Considering that this year is a sensitive one in Beijing due to a major leadership change set to begin in October, I wouldn’t be surprised if we see regulators take some steps in the next 2 months to force SNS site operators to better comply with the real name registration rule or face penalties or even closure. If and when that happens, look for a period of turbulence and perhaps even a major closure or 2 in the social media space.

Bottom line: Most of China’s SNS operators are probably well out of compliance with Beijing’s real name registration rule, setting the stage for a potential crackdown in the next 2 months.

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