China’s Anti-Monopoly Watchdogs Issue New Rules to Tech Giants For Fairer Market Play
China’s regulatory watchdog on Feb. 7 released new anti-monopoly regulations targeting tech giants and a recent escalation in unfair competition.
The new regulations presented by the State Administration for Market Regulation (SAMR) include a series of anti-trust practices that would cast restrictions on the country’s e-commerce platforms, such as Alibaba’s Taobao, JD.com and Meituan, as well as fintech players including the country’s two biggest mobile payment platforms — Tencent’s WeChat Pay and Ant Group’s Alipay.
The new rules, which finalize and formalize the regulations unveiled last November, aim to end monopolistic behaviors such as limiting e-payment channels for customers, price discrimination between new and old customers, edging out smaller industry competitors, and compulsory illegitimate collection of user data.
The regulations also seek to protect the rights of online merchants, prohibiting platforms to force them to “choose one from two”. This is a common practice that forces sellers to open online stores either on Alibaba-backed platforms such as Taobao and Tmall or on the Ant empire’s rivals such as Pinduoduo and JD.com, narrowing their chances to attract traffic and generate profit.
The new rules have already been put to use – e-commerce company Vipshop was fined 3 million yuan on Feb. 8 for unfair competition. The company publicly apologized for the issue and promised to carry out “comprehensive rectification” following the penalty.
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Internet companies have been at the short end of increasingly tight probes by the Chinese regulators recently, including behemoths such as Alibaba and Meituan, as well as Huya and Douyu. Investigations have also targeted non-bank online institutions, including the Alipay and WeChat pay.
Last December, tech giants Pinduoduo, Tencent, Alibaba, JD.com, Meituan and Didi Chuxing, were all called for talks with SAMR over newly-set regulations over community group buying.