Daily Management Review

Tech Giants Targeted By New Anti-Monopoly Rules In China


Tech Giants Targeted By New Anti-Monopoly Rules In China
The grip of the tech companies of China which is already stringent was strengthened further on Sunday with the country’s market regulator releasing a set of new guidelines related to anti-monopoly policies that are specifically designed to clamp down on market dominance of some of the internet platforms.
The new regulations turn into law a set of proposals related to reduce market monopoly which were released in the form of a draft in November last year. The new regulations also clarify a series of monopolistic practices that are being targeted by the country’s regulators to curb dominance of tech companies of the country.
According to analysts, there will be additional pressure on the leading internet services of the country because of the new regulations. The new regulations are likely to impact the likes of e-commerce sites such as Alibaba Group's Taobao and Tmall marketplaces or JD.com, said analysts. The targeted companies also include payment services operating China such as Ant Group's Alipay and Tencent Holding's WeChat Pay.
According to the new rules which were published on the website or the State Administration for Market Regulation (SAMR), tech and internet based companies will be barred from indulging in a range of behaviour such as forcing merchants to choose between the country's top internet players – which has been a criticised practice in the country for a long time now.
The latest guidelines would "stop monopolistic behaviours in the platform economy and protect fair competition in the market", SAMR said.
Companies will also be stopped from price fixing, restricting technologies and using data and algorithms for manipulating the market by the new rules, the notice published on the website also said.
There has been an increase in complaints of behaviour of companies with respect to internet-related anti-monopoly and it was becoming difficult for the SAMR to efficiently regulate the industry, the regulator said in a Q&A that accompanied the notice.
"The behaviour is more concealed, the use of data, algorithms, platform rules and so on make it more difficult to discover and determine what are monopoly agreements," it said.
The laissez-faire approach towards its tech giants that was previously followed by the Chinese authorities and the government has in recent months changed as the regulator has sought to tighten its grip on the market activities of the tech firms.
After a dramatic suspension of its $37 billion initial public offering plan drawn ip and finalised for the group’s payment affiliate, Ant Group, an antitrust investigation into Alibaba Group had been launched by China’s regulators in December last year. The company was warned by the regulators at that time over issues related to its business practices including its policies and practices to force merchants to sign exclusive cooperation agreement that essentially put at a market disadvantage other internet platforms and companies.