China’s Regulator Orders Tech Companies to Open ‘Walled Gardens’

China Regulator to Tech Cos: Open 'Walled Gardens'

A China regulator has told tech giants Alibaba, Tencent and others to stop blocking one another’s website links on their respective platforms, Reuters reported.

This is the latest chapter in an ongoing regulation boost China is leveling against companies, Reuters reported, citing the 21st Century Business Herald. The Chinese internet has been historically dominated by numerous tech giants, which have been known for blocking rivals’ links on their platforms. Analysts have called them “walled gardens.”

The Ministry of Industry and Information Technology has given a deadline for when the platforms must be unblocked, according to the report. If the firms don’t comply, there could be other actions taken.

Regulators have been accusing the companies of restricting the choices for customers and trying to build monopolies, the report stated.

The Wall Street Journal (WSJ) reported that Alibaba and Tencent have been slowly exploring the ways they could open up their services to each other. This has thus far consisted of debuting Tencent’s WeChat Pay to Alibaba’s Taobao and Tmall eCommerce marketplaces, Reuters reported.

China’s ongoing regulatory tightening could end up having a sobering effect on the innovation of tech companies. The crackdown has already had effects on large fines, canceled mergers and frozen public offerings.

Read more: China’s Big Tech Crackdown Could Chill Innovation

Alibaba, for example, was hit with a $2.8 billion antitrust penalty, and food delivery platform Meituan has been probed for its alleged anti-competitive behavior.

Meanwhile, Tencent has seen its merger with Huya and DouYu blocked, while Ant Group saw its own initial public offering (IPO) stopped.

There’s a conundrum of sorts, with the question being how much power to allow in terms of eCommerce, social media and other such platforms.