Saturday, December 4, 2021

China’s tech titans face new anti-monopoly crackdown

Alibaba alone boasts nearly 900 million mobile monthly active users – more than half of China's population.

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New anti-monopoly rules for China’s e-commerce giants were introduced on Sunday as regulators try to crack down on anti-competitive behaviour.

The rules suggest increasing unease in Beijing with the growing influence of digital platforms and are aimed at stopping China’s e-commerce monsters Alibaba and from abusing their dominant market position. Together they account for roughly three-quarters of Chinese ecommerce.

Alibaba alone boasts nearly 900 million mobile monthly active users – more than half of China’s population.

China’s State Administration for Market Regulation (SAMR) wants to stop price-fixing, predatory pricing and unreasonable trading conditions.

The new rules stop e-commerce platforms from forcing vendors to deal exclusively with them. There are also rules against restricting technologies and using data and algorithms to manipulate the market.

The rules will also apply to financial technology (fintech) and payments companies such as Tencent’s WeChat Pay and Ant Group, Alibaba’s payments affiliate.

SAMR said reports of anti-competitive behaviour have been increasing, and that it was facing challenges regulating the industry.

“The behaviour 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.

On Monday, SAMR announced it had fined online discount retailer Vipshop nearly US$500,000 (RM2 million) for unfair competition.

Between August and December last year, the retailer developed a system to obtain information on brands it and competitors sold, which gave it an advantage. The regulator said Vipshop used its system to influence user choices and transaction opportunities and to block sales of particular brands.

SAMR is also currently carrying out an antitrust investigation into Alibaba, following Ant Group’s decision to drop a planned US$37 billion share market launch after regulators intervened.

The moves come as the EU and the US are also seeking to curb the power of internet giants.

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