China Clarifies Big Tech Monopoly Rules

China tech firms

China’s State Administration for Market Regulation (SAMR) published new guidelines Sunday (Feb. 7) to strengthen anti-monopoly restrictions on Big Tech platforms, Reuters reported.

The guidelines build on a draft law published in November, clarifying the “monopolistic practices” that the SAMR plans to target, according to Reuters. The SAMR said the guidelines aim to prevent companies from price fixing, manipulating the market using algorithms, and restricting technologies.

It also said the guidelines would “stop monopolistic behaviours in the platform economy and protect fair competition in the market,” Reuters reported.

The draft rules in November also noted that the guidelines would prevent host companies from disallowing brands from selling their products on more than one platform.

SAMR said in December that it was investigating Alibaba over claims that the eCommerce giant was engaging in this practice, which is called “er xuan yi,” or “pick one of two.” Businesses and rival marketplaces have claimed that Alibaba has forced businesses to sell only on Alibaba sites, or not sell on them at all.

The regulations will put pressure on China’s largest tech platforms, Reuters reported, such as eCommerce sites JD.com and Alibaba and financial service platforms such as Tencent’s WeChat Pay and Ant Group’s Alipay.

Initial news of the newly planned regulations caused Big Tech stock values to plummet $280 billion back in November.

But the SAMR warned in the notice that anti-monopoly practices by internet companies have been increasing, and regulating the industry will be challenging, Reuters reported.

“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,” the SAMR said, according to Reuters.

Earlier this month, Ant Group agreed on restructuring plans with Chinese regulators to turn the FinTech into a financial holding company, which will place it under tighter capital requirements.

Despite the regulatory troubles, Alibaba, which owns Ant Group, still soared in the fourth quarter, according to earnings results, reaching annual active users of 779 million and revenue of $38.9 billion.