China’s Tech Clampdown Is Spreading Like Wildfire

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The notoriously secretive Chinese government is cracking down on online censorship this week with a new law that requires online video hosts to register with the government, reports the Wall Street Journal (paywall). The law was enacted last week but wasn’t made public until yesterday, after huge media reports on it. It requires social media platforms such as Weibo and Tencent’s QQ to register with the government and post an annual report on how often they remove content and the techniques they use to do so. The law also requires online content hosts to store user data on Chinese servers.

China is the world’s largest producer of smartphones and has a vested interest in maintaining its domestic smartphone market. But what happens when that market starts to slip? This is something that China is going to have to get used to. On Saturday, China’s top court issued a ruling that effectively banned all foreign companies from selling their smartphones within the country. China is already the world’s largest smartphone market, and the ruling means that it will soon become the only smartphone market in the world.. Read more about china tech industry and let us know what you think.

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– The latest salvos in China’s campaign against its technology companies make one thing clear: Jack Ma It is not only companies that are scrutinized by regulators. What began as a government crackdown on the anti-competitive practices of China’s internet giants has evolved into a broader clean-up of the country’s fast-growing and, until recently, free-spending technology sector. Not a week seems to go by without Chinese regulators suing tech companies for alleged violations ranging from inconsistent pricing to user privacy violations to harsh working conditions. In May, China’s cyber regulator accused 105 apps, including job search apps and short videos, of illegally collecting and using personal data. He asked the companies to resolve the problems within three weeks or face legal action. The orders came days after 117 other apps were ordered to fix problems with user data. Regulators have also met with ride-sharing services about possible driver abuse, and Internet companies have been ordered to change their data and credit practices. Authorities have also criticised delivery platforms for what they see as misleading pricing tactics. In less than six months, Chinese tech giant Ant has gone from planning a major IPO to restructuring in response to central bank pressure. Although the United States is also focusing on key technologies, China is faster in this area. Illustration photo: Sharon Shea For tech companies, the request to meet with regulators sends a signal to the public and investors that regulators are giving companies a chance to fix their problems rather than launching a formal investigation, according to people familiar with the inquiry. According to those surveyed, this has led some technology companies to seek their place in the hotspots, putting pressure on researchers. China’s goal is to get companies to comply with regulations without government intervention, he said. Angela Zhang, Associate Professor of Law at the University of Hong Kong, author of China Antitrust Exceptionalism. Until now, regulation of mobile applications in China has focused on controlling controversial or inappropriate content. The crackdown on such content on social media continues in the country: Xiaohongshu, a popular social media and e-commerce app, became the latest target of regulators after it posted a message on Twitter Weibo last week commemorating the anniversary of the blowing up of Tiananmen Square in 1989 and had its account closed, The Wall Street Journal reported. At the same time, the latest round of regulation targets a wider range of abuses, many of which have long been considered the norm in a thriving and poorly regulated sector. China has one of the thinnest traditions of antitrust law of any major economy in the world and has always used these regulations to limit the market power of foreign firms. Domestic Internet companies have largely been left to fend for themselves as China seeks to develop its own technology industry. Things began to change late last year, when the IPO of financial technology giant Ant Group Co. was canceled, days after its biggest shareholder, Mr. Ma, made a speech that infuriated state leaders. In December, China launched an investigation into Alibaba Group Holding Ltd. BABA 0.91 which was also co-founded by Mr. Ma. In April, regulators imposed a record $2.8 billion fine on Alibaba. They found that the company had abused its dominant position by engaging in the practice of er xuan yi, which literally means choosing one from two. Such allegations have plagued China’s e-commerce sector for years, leading to public complaints and lawsuits without any concrete evidence.

A Meituan employee scans his face with his phone before starting work. The food delivery giant faces an antitrust investigation by China’s top market regulator.

Photo: Tingshu Wang/Reuters China’s top market regulator launches antitrust investigation into food supplier Meituan 3690 -0.73% on the same tactics. Meituan said it would cooperate with the investigation and its activities would continue as normal. The government wants to send all these technology conglomerates a very clear message that the government is in charge, said Mark Nutkin, director of Beijing-based industrial research firm Marbridge Consulting. Dissenting opinion will not be tolerated. So far, with the exception of Ant, the warnings have not required a complete overhaul of the companies. For some companies, appeasement from Chinese authorities comes down to changing some app features, while others may suffer more if a large part of their profits depend on collecting and sharing data, according to employees of five app companies targeted by regulators last month. Some employees said they had become more careful about compliance and anything that could be considered a violation of the rules. ByteDance Ltd, whose short video app Douyin is one of the targets for unauthorised data collection, is in the process of recruiting compliance officers and lawyers and tasking them with reviewing the app’s terms of use and various features to ensure they are not in breach of the rules, company officials said. ByteDance declined to comment.

Photo: Greg Baker/Agence France-Presse/Getty Images According to Zhang, local governments have also become more involved in technology platforms. Shanghai’s market regulator recently fined Ele.me, Alibaba’s delivery app, 500,000 yuan, equivalent to about $78,000, for violating China’s food pricing and safety laws. Alibaba did not respond to a request for comment. The Shanghai Consumer Protection Committee said it has questioned Meituan and the e-commerce company. Pinduoduo Inc. in May for allegedly misleading online claims, product quality and non-delivery. Meituan and Pinduoduo did not respond to requests for comment.

How do you think China’s attempts to clean up its technology sector will play out? Join the discussion below. Chinese regulators have also called on the country’s citizens to cooperate in monitoring the behavior of technology companies. Regulators have indicated in their announcements that many of the recent warnings were based on user complaints. These complaints have been coming for some time and it was inevitable that measures to protect consumers and SMEs would follow, he said. François Renard, Partner and head of Allen & Overy’s antitrust practice in Greater China. What’s impressive, of course, is that this is all happening at the same time. Last month, eight government agencies, including China’s Ministry of Transport and Ministry of Public Security, summoned eight transportation companies, including giants Didi Chuxing Technology Co. and Meituan, in response to growing public concern over drivers’ rights.

China restricts the activities of technology companies

Related documents selected by the editors Didi did not respond to a request for comment. The company has described its pricing mechanisms in detail in WeChat Post in May and thanked the public for their comments and criticisms. Tech companies have responded to these allegations by promising to be good corporate citizens. In a conference call on 28. Mei, Meituan’s CEO Wang Xin. said the company had assembled a team to work with regulators in the investigation and remained committed to social responsibility. According to a document released Thursday, Mr Wang transferred shares worth HK$17.3 billion, or $2.3 billion, to his personal fund. The donations will be used to fund education and research projects, Meituan said. April, Tencent Holdings Ltd. TCEHY 1.53 Director-General Pony Ma. said the company will allocate $7.7 billion to fund projects related to the public good, rural renewal and carbon neutrality, among others. The games and social media giant has been condemned by regulators this year for, among other things, financial services risks and failing to properly account for past acquisitions. If we use our technology and products to achieve greater societal benefit, I think we will be better received overall by our users, customers, government and employees, he said. Martin Lau, Tencent’s chairman, when the results were announced last month. -Keith Zhai and Raffael Huang contributed to this article. Email Stephanie Young at [email protected] Copyright ©2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8According to a recent report from the Wall Street Journal, China is using its growing tech sector as a political weapon. The country is clamping down on a number of companies, including those that provide a wide range of tech products—from internet tools to game consoles—that the government deems to be fundamentally against the interests of the country’s ruling Communist Party.. Read more about australia-china dispute and let us know what you think.

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