China’s market regulators issue new draft rules. The goal is to stop unfair competition on the internet, as the Chinese Government continues to crack down on the country’s technology sector.
The rules, published by the State Administration for Market Regulation (SAMR), cover a wide range of areas from bans on how companies can use data to removing fake product reviews.
The policy ultimately had an impact on Chinese technology stocks listed on the Hong Kong capital market falling sharply. For example, shares of gaming giant Tencent fell 3.5% in late morning trade, while e-commerce giant Alibaba fell 2.5%.
The new SAMR rules are a continuation of Beijing’s regulatory assault on the Chinese tech giant.
SAMR’s New Rules
Here are some other key rules outlined:
– Operators must not provide false data, such as the number of clicks on acontent.
– Operators should not hide negative reviews and only promote positive reviews.
– Internet platforms must not use data, algorithms and other technical means to influence user choices, or other methods to carry out so-called traffic hijacking. This is where companies are looking to direct users to their own website or service while they browse others.
– Operators must not use data and algorithms to collect and analyze competitor trading information.
SAMR said it could hire third-party agencies to audit data if operators violate the rules.
Regulators are seeking public opinion on the new rules until September 15. That rule is not yet in effect. However, the draft SAMR rules highlight the push by market regulators to tighten laws around antitrust and competition. Earlier this year, the authority announced antitrust guidelines for the so-called platform economy.
