China tightens its noose on regional tech giants with new anti-monopoly rules

By Amirtha P S, Desk Reporter
  • Follow author on
Representational Image

China’s market regulator has issued new anti-monopoly guidelines that aim to control internet platforms by tightening existing restrictions faced by the country’s tech giants.

With the new rules, the anti-monopoly draft which was released in November will be now validated and it clarifies a series of monopolistic behaviors that the regulators plan to eliminate.

The newly issued guidelines will put pressure on the country’s leading internet services, including the eCommerce sites such as Alibaba Group’s Taobao and Tmall marketplaces or as well as the payment services like Ant Group’s Alipay or Tencent Holding’s WeChat Pay.

The rules, issued by the State Administration for Market Regulation (SAMR) on its website, prohibits companies from several practices like forcing merchants to choose between the country’s top internet players, a long-time practice in the market. “The latest guidelines would stop monopolistic behaviors in the platform economy and protect fair competition in the market,” SAMR adds.

The notice published by SAMR adds that it will further bar companies from price-fixing, restricting technologies and using data and algorithms to manipulate the market.

“Reports of internet-related anti-monopoly behavior had been increasing, and that it was facing challenges regulating the industry. The behavior 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,” SAMR said.

In recent months China has started to tighten the scrutiny of tech giants in the country. In December, regulators launched an antitrust investigation against Alibaba Group following the suspension of the $37 billion initial public offering plan of its payment affiliate, Ant Group.

At that time, the regulators had alerted the company over practices including forcing merchants to sign exclusive cooperation pacts at the expense of other internet platforms.