Beijing has yet again slapped regulations on Big Tech in China. This time, the Ministry of Industry and Information Technology (MIIT) has told app makers and websites to stop blocking links to their rivals, or face the consequences.
In a Q&A session at the start of the week on manufacturing and cyber development, MIIT spokesperson Zhao Zhiguo said this practice of restricting access to external services damages the rights of users and unfairly disrupts the market.
The g-man said the action was prompted by complaints logged by the ministry, and added that companies would be allowed to self-examine and correct their policies before any punishment is decided.
“We are going to step up regulation, supervision and monitoring through a number of means. We hope that these problems can be rectified. For those enterprises who are failing to correct their measures, we will issue punishments,” said Zhao speaking in Chinese, adding: “Eventually we are going to form an ecosystem where different platforms can access one another without blockage without limitation.”
Zhao did not specify what the consequences would be for organizations that failed to abide by the new rules. He also did not specify which companies triggered the regulations, although he did cite instant-messaging platforms as a potential offender.
That said, a Chinese publication reported Alibaba and Tencent attended a meeting with the ministry on September 9 in which they were informed of the incoming rules and were told to end the practice of blocking access to competitors. Both businesses later said they agreed to fall in line. Huawei, Baidu, ByteDance, and Xiaomi were also in attendance.
This behavior of preventing access to rival services is, or rather was, common place in China. For example, Tencent’s payment platform WeChat Pay is unavailable when using Alibaba’s e-commerce sites, and Alibaba’s services can’t be used via WeChat Pay, either.
Furthermore, ByteDance, the maker of TikTok, sued Tencent in February, alleging the latter’s WeChat and QQ messaging services wouldn’t allow links to content on the Chinese version of TikTok, Douyin.
Recently Beijing instituted a slate of regulations and crackdowns on tech companies, including those that prevent monopolistic behavior. In July, the Chinese government’s antitrust watchdog State Administration of Market Supervision (SAMR) banned the merger of Tencent gaming outfits Huya and DouYu.
Alibaba’s finance arm Ant Group was forced to restructure its loans business before being allowed to operate as a consumer finance company in June.
Back in November 2020, SAMR announced a complete overhaul of anti-monopoly laws, including a review of consumer-protection rules and truth in advertising, and pondering whether the structure of the market in the internet-era permits competition.
But it’s not just monopolistic behavior that the Chinese government is looking to control and curtail. Data management and storage is another area Beijing has used to lasso in industry.
In July 2021, Chinese Uber-like DiDi was booted from the nation’s app stores on the grounds it was not compliant with Beijing’s privacy rules just ahead of its US IPO.
In May, the Cyberspace Administration of China (CAC) ordered 105 apps to stop improperly collecting and using personal data, including LinkedIn, Big, Douyin, TikTok and Baidu.
As for Alibaba and Tencent, shares fell on Monday for both in the single digits. For Alibaba, the fall comes amid reports that Beijing seeks to break up its financial payments arm Alipay. ®