Shanghai — The Chinese administration has moved to strengthen control of its technology sector on Tuesday, releasing detailed rules aimed at addressing unfair competition and the handling of critical corporate data.
Beijing has been reversing its years of laissez-faire approach in recent months because of the risk of abusing market power to curb competition, misuse consumer information and violate consumer rights. So, we are strengthening our efforts on the Internet platform.
As part of its expanding crackdown, the Chinese administration has vowed to impose heavy fines on companies such as e-commerce giant Alibaba Group and social media company Tencent Holdings and draft new laws on innovation and monopoly. ..
On Tuesday, the State Market Regulatory Authority (SAMR) issued a series of draft regulations banning unfair competition and limiting the use of user data.
Alibaba, JD.com Inc, and Baidu Inc’s New York-listed stocks fell between 2.9% and 3.5% in pre-market transactions. Tencent-backed online brokerage firm Futu Holdings fell 7%, making it one of the most actively traded stocks on US exchanges, while peer UP Fintech Holding fell 3%.
Tencent Music Entertainment Group planned to increase its losses six times in a row, despite reporting a 3.8% reduction and higher-than-expected earnings.
Michael Norris, Research and Strategy Manager at Shanghai-based consultancy Agency China, said:
“If promulgated, regulations could increase the compliance burden on transaction platforms such as e-commerce marketplaces and short shoppingable video apps.”
No traffic hijacking
Internet operators must not “support the conduct or implementation of unfair competition on the Internet, disrupt the order of market competition, or influence fair transactions in the market.” SAMR wrote in the draft. 15 deadline.
Specifically, regulators have stated that operators must not use data or algorithms to hijack traffic or influence user choices. You also may not use any technical means to illegally obtain or use the data of other operators.
Companies are also prohibited from creating or disseminating misleading information to damage the reputation of their competitors and are used to attract positive reviews, coupons, or “red envelopes” ( Marketing practices such as cash incentives) should be stopped.
Shortly after the draft technical rules were announced, the Chinese Cabinet announced that it would also implement regulations to protect key information infrastructure operators from September 1.
The state legislature passed in 2017, stating that operators need to perform annual security inspections and risk assessments and prioritize the purchase of “safe and reliable network products and services.” It details the groundbreaking cybersecurity law.
The Chinese administration has also acquired ownership of the domestic entities of social media giants ByteDance and Weibo, Reuters reported on Tuesday citing a company submission. Weibo’s share, like Twitter in China, fell 2.6%.