China has marked its latest crackdown on the technology sector as the authorities announced new rules today to tackle unfair internet competition and companies’ handling critical data.
The State Administration for Market Regulation (SAMR) published a set of draft regulations banning unfair competition and restricting the use of user data.
Shares of Chinese tech companies listed in Hong Kong tumbled after the draft rules were published. Video platform Bilibili dropped as much as eight per cent, Alibaba fell by 4.9 per cent, Tencent slipped about four per cent, while food delivery service Meituau dropped 3.2 per cent.
The regulator warned that internet operators “must not implement or assist in implementing unfair competition on the Internet, disrupt the order of market competition, affect fair transactions in the market.”
Business operators should not use data or algorithms to hijack traffic or influence users’ choices and may not use technical means to capture or use other business operators’ data illegally, the SAMR said in a draft, which opens for public feedback until 15 September.
Companies would be banned from fabricating or spreading misleading information to damage the reputation of competitors under the new regulations.
Marketing practices to entice positive ratings, such as fake reviews and coupons or “red envelopes” – cash incentives, would also be restricted.
Meanwhile, China’s State Council also announced today to implement regulations on protecting critical information infrastructure next month.
According to the State Council, any purchases of internet products and services that may affect national security by operators should go through security scrutiny.