• Data Protection

  China’s Big Tech crackdown and what does it mean?

  Posted by John Johnson on 14 November 2020 at 6:18 am

  China’s government published draft antitrust rules this week aimed at curbing monopolistic behaviour by its giant internet platforms, a move that analysts believe will lead to increased scrutiny of e-commerce marketplaces as well as food delivery and payment platforms, among others.

  The proposed rules are meant to protect or encourage fair competition and to safeguard consumers.This is a dramatic shift from the mostly hands-off approach the government has adopted so far with its tech giants.

  President Xi Jinping’s government has not explained what led to the draft rules, the move is likely to affect some of the biggest internet firms in China including e-commerce giants like Alibaba, JD.com and Pinduoduo, as well as food delivery platform Meituan, and social media and gaming giant Tencent, among others.
  

  Alibaba and Tencent dominate China’s growing ecosystem of tech platforms that allow users to chat with friends and family, transfer money, shop online, take out loans, order a ride-hailing car, stream music and movies, play online games and much more.

  Some of the things these firms have been accused of doing include the compulsory collection of user data, treating customers differently based on their spending habits and setting algorithm-based prices favouring new users.

  One of the most egregious examples of supposed arm-twisting by tech firms involves a “pick one of two” tactic, in which vendors – usually small enterprises – are forced to choose between Alibaba and e-commerce platforms such as Pinduoduo, in which Tencent is a shareholder.

  China’s State Administration for Market Regulation, the body which regulates monopolies and which issued the draft, said it wanted to prevent platforms from dominating the market or from adopting methods aimed at blocking fair competition.

  In the days since the draft rules were revealed, Chinese tech giants lost almost $290 billion in market value as investors frantically sold the stocks.

  The proposed rules are meant to protect consumers and small business owners who use online platforms to sell their goods.

  But the lack of detail so far in the government’s plans makes it unclear whether it will be able to achieve those goals.

  

  John Johnson replied 4 years, 8 months ago 1 Member · 0 Replies
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