Former Mayor of China’s Largest Municipality Huang Qifan Interprets Why Beijing Scrutinized the Internet Industry

China-cer reported that the 2021 (20th) China Internet Conference organized by the Internet Society of China was held in Beijing from July 13 to 15. Huang Qifan, former mayor of Chongqing and Director of Industry Transformation Consultation Committee of the Internet Industy Institute under Tsinghua University, spoke at the event.

According to China-cer, Huang Qifan believed that, in the past 20 years, China’s consumer Internet had flourished, and a number of world-renowned enterprises such as Alibaba, Tencent, Baidu and JD.COM had emerged, connecting 1 billion netizens and making remarkable progress. But there were still at least four problems regarding the characteristics of the development of China’s Internet.

First, there was often a zero-sum game between enterprises. In the end, the winner of the competition in the consumer Internet industry often dominated all the markets, so many early Internet companies desperately burned money to expand their scale in order to defeat their rivals. After gaining monopoly advantage, they charged high threshold fees and service fees to platform users. As a result, the platform rates of some online sales platforms were higher than those of offline high-cost department stores and supermarkets, which seems rather unreasonable.

The second problem was that many enterprises preferred taking advantage of the weakness of human nature to design products. The freedom dominated by the online market at the early stage of its formation made the cost of breaking promises extremely low, so many enterprises would design various products to obtain traffic while ignoring the long-term interests of consumers and the overall development of the market. For example, some information service companies attracted users to click and watch videos and news through clickbait links and articles.

SEE ALSO: Chinese Government Issues New Regulation on Automobile Data Security, Requiring Enterprises to Not Collect Data by Default

Third, enterprises collected too much personal data. In the era of consumer Internet, there was a lack of data governance norms and many Internet companies required users to provide personal data when using products. For example, some companies had obtained the right to use the microphone of consumers’ mobile phones which allowed them to track users’ habits by eavesdropping on their conversations. This practice violates the country’s consumer protection laws.

Fourth was the gathering of big-data. Internet companies divided users into different categories according to big data and then charged different prices, which violated the principles of fairness and transparency in the market.

SEE ALSO: China to Introduce New Laws to Regulate “Big Data Killing” by Internet Enterprises

According to the report, Huang Qifan believed that with the continuous development of the Internet industry and the further improvement of the rule of law in the country, these unreasonable behaviors mentioned above would not work in the era of industrial Internet in the next 10 years.