China market regulator tightens rules on unfair internet competition

By Amirtha P S, Desk Reporter
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The Chinese market regulator has issued a set of draft rules aimed at stopping unfair competition on the internet and restricting the use of personal data of users as the country continues its broad crackdown on its technology sector.

The rules published by the State Administration for Market Regulation (SAMR) cover a wide range of areas from prohibitions on the way companies can use data to stamping out fake product reviews.

According to the regulation published business operators are banned from using data, algorithms or other technical means to hijack traffic or influence users’ choices. They may also not use technical means to illegally capture or use other business operators’ data.

Further, the regulator stated that the firms cannot use technological means to maliciously impose incompatible barriers to other legal internet products and services. It added that in cases involving violations, third-party institutions may be hired to audit data.

The proposed regulations come after SAMR imposed various restrictions and punishments on tech giants in an effort to restrict anti-competitive or monopolistic behavior in the sector.

Following a months-long probe, in April SAMR fined the eCommerce giant Alibaba Group a record $2.5 billion for engaging in unfair competition. In July, the regulator ordered social media company Tencent Holdings to end exclusive licenses for certain songs on its music streaming service, and also blocked a merger between two game streaming companies Tencent had led.

The regulator is seeking public opinion on the new rules until September 15 and they have not yet come into effect.

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