Beijing announces six-month campaign to bring internet industry to heel

Following a sustained campaign from across the Chinese government which has clipped the wings of some of its largest companies, the Ministry of Industry and Information Technology, the technology regulator, has announced a six-month rectification campaign of the country’s online industry designed to stop anticompetitive practices and enhance security.

Why it matters

First, the pressure went onto the biggest companies, Alibaba and Tencent who in early July began working on opening up their services. Now, these precepts will apply across the board. Interoperability of different systems should, theoretically, be good for users and good for marketers as the new rules force tech firms to open themselves up.  

What’s happening?

In a statement issued online, (in Chinese) and reported by the business magazine Caixin, among others, the Ministry has outlined four main areas that it intends to control:

• Disrupting market order
  This effort centres on the blocking of competitors’ websites, which has become common practice in some ‘walled-garden’ services that operate across different categories, such as gaming and payments.
  
  
• Infringing on users’ rights
  The Ministry points to misleading pop-ups, such as false close buttons, and not allowing users to opt-out of personalised services.
  
  
• Threats to data security
  These range from failing to adequately protect user data through techniques like encryption to ensuring that users have given consent before their data is passed onto a third party.
  
  
• Violating other regulations (resource and qualification management)
  Mostly using non-registered network access resources or missing website filing deadlines.

Background

The announcement follows major interventions against Ant Financial, for which the Chinese government called a halt to its IPO, before fining parent company Alibaba for antitrust offences.

Many observers have seen these measures as a way to curb the consumer tech sector’s mounting political and financial power. To this end, a more stable, interoperable market could prove a key step.

Sourced from The Ministry of Industry and Information Technology, Caixin, Wall Street Journal