The government of China has announced new measures that restrict the power of big tech. According to the Chinese government agency that is responsible for regulating competition, avoiding monopoly and protecting intellectual property, the new regulations seek to end unfair competition and limit how companies use data of the users.
At first glance it seems that these measures are more aimed at ‘protecting’ (in theory) the Chinese user of large tech companies (both international and global technology) to isolate (even more so) the Chinese user from the global Internet.
Even so, knowing the history of this country, its ability to control the country’s citizenship, and how it has used its rules to persecute groups, it is difficult to know exactly what it will lead to the implementation of these laws.
The draft presented today is open to public comment before September 15, so it is not final. Still, the internet giants have seen a sharp drop in stocks with this announcement.
Internet operators may not facilitate unfair competition
One of the most outstanding measures of those announced today by the State Administration for Market Regulation (SAMR) or State Administration for Market Regulation is that internet operators should not implement or facilitate the implementation of unfair competition on the Internet, interfere in the natural flow of competition, or influence fair market transactions, according to the text presented.
On the other hand, the operators may not interfere with internet traffic or influence in any way the choices made by users. In other words, the regulator affirms that commercial operators must not use data or algorithms to hijack traffic or to influence decisions of users (common practices such as in the case of Amazon). Nor may they use technologies to illegally capture or use data from other commercial operators.
Companies will also be banned create or spread misleading information to damage the reputation of your competitors and they will have to stop marketing practices like fake reviews or coupons. Those baptized as ‘red envelopes’ – incentives in the form of money for customers to leave positive reviews on sales websites – will also be prohibited.
It should not be forgotten that companies such as Alibaba, Tencent or Baidu have suffered large fines in recent years in their country of birth for practices such as investments or purchases that could lead to monopolies and this legislation seems to strengthen the pressure against the giants. Too against foreign firms operating in the Asian country.
Limit on the use of citizen data that companies handle
On the other hand, although the Chinese government is famous for its great surveillance system and for its use of technologies to handle large amounts of private data of the country’s population (and even for allegedly obtaining the information through companies of Chinese origin irregularly), in its new text also limits the use that technology can give to the information generated by users.
Although for now only, the limitation of the use of data will be mainly so that they do not use the information to damage the reputing of other companies or to improve their reputation “through illegal procedures“.
For now, it remains to be seen if the results are really in favor of the consumer and the general public or to reinforce the great control that the government has over the economy, as demonstrated with his interference in the bitcoin monerdas. On the other hand, when we talk about unfair competition, it should be remembered that this has been a concept used in many cases by China to exercise protectionism over its technology.