China’s New Rules Could Affect Alibaba.

China Issues New Rules Targeting Tech Firms.


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China’s market regulator has released new anti-monopoly guidelines aimed at internet platforms, tightening existing restrictions faced by the country’s technology giants. The new rules, published on Sunday, formalize an earlier anti-monopoly draft law released in November and clarify a series of monopolistic practices that regulators plan to crack down on.

The rules, issued by the State Administration for Market Regulation (SAMR) on its website, bar companies from a range of behavior, including forcing merchants to choose between the country’s top internet players, a longstanding practice in the market. SAMR said the latest guidelines would “stop monopolistic behaviors in the platform economy and protect fair competition in the market.

” In a Q&A explanation accompanying the notice, SAMR said 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,” it said. China has in recent months started to tighten scrutiny of its tech giants, reversing a once laissez-faire approach.

Chinese authorities halted payment services firm Ant Group’s $ 37bn initial public offering in November about anti-trust concerns. China’s Politburo, the top decision-making body of the Communist Party, pledged in a meeting at the end of last year to strengthen anti-monopoly efforts in 2021. At the time, regulators warned the company about practices including forcing merchants to sign exclusive cooperation pacts at the expense of other internet platforms.

Lawsuits over competition issues have been filed by companies even as regulators are moving to step up scrutiny. Byte Dance Ltd filed a lawsuit last week against Tencent Holdings Ltd over alleged monopolies in its We-chat and QQ platforms, escalating a feud between two giants of Chinese social media. In one of the first uses of their newly expanded arsenal of rules, Chinese regulators hit online discount retailer Vipshop Holdings Ltd with a 3 million yuan ($ 464,000) fine, the biggest to date in the recent clampdown.

In a sign that regulators are increasingly willing to use more tools to rein in monopolistic behavior in the tech sector, Vipshop was punished for violations of a law prohibiting unfair competition, which allows for fines of up to 5 million yuan. SAMR said on Monday that from August through December last year, Vipshop had developed a system to obtain information on brands that gave Vipshop a competitive advantage.

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