China plans strict internet competition rules as tech crackdown continues


Chinese regulators have published a strict new set of rules for the internet sector in the latest stage of the country’s crackdown on technology firms.

On Tuesday, China’s State Administration for Market Regulation (SAMR) issued a draft of the new rules, which included provisions that internet operators “must not implement or assist” unfair competition online or “disrupt the order of market competition”.

The regulator also said that businesses operating online should not use algorithms or data to influence users or web traffic, while the draft rules also ban companies from preventing merchants from listing on rival platforms.

Firms will also be barred from spreading misleading information against competitors as well as engaging in certain marketing tactics such as fake reviews and incentives to leave positive user reviews.

The new regulations are currently open for public response until September 15, however, the strict guidelines will likely serve to further exert government power over China’s largest tech companies.

Regulators in the country have previously come down hard on the sector as a result of what has been deemed anti-competitive behaviour, having previously issued a record US$2.5bn fine to ecommerce giant Alibaba as well as ordering media conglomerate Tencent to end exclusive music licences deals as well as blocking a company-led merger between two streaming firms.

Both Alibaba and Tencent shares dropped during Tuesday’s session in Hong Kong in the wake of the draft regulations, while in London, China-focused specialist funds such as Fidelity China Special Situations PLC (LSE:FCSS) and Baillie Gifford China Growth Trust PLC fell sharply.

READ: How shockwaves from China crackdown spread to London and New York – 2-minute explainer


Please enter your comment!
Please enter your name here