Chinese SAMR has published draft regulations that aim to prevent unfair competition and the use of critical data by tech companies. It covers various areas of work of tech companies, up to the ban on publishing fake product reviews. China's antitrust market regulator released the draft rules on August 17th. The new regulations aim to end the unfair competition on the Internet and restrict the use of user data on the Internet.
The rules published by the Market Regulatory Authority (SAMR) cover a wide range of activities of companies that operate on the network, up to the prohibition of using customer data to replicate fake reviews of their products. Online operators should not use user data, algorithms, or other means to capture traffic and influence user choices. The same prohibition applies to data and funds of other companies. The regulator said that companies would not be able to use technology to impose barriers to other legal Internet products and services maliciously. In cases involving violations of these rules, third parties may be hired to verify the data. The draft rules will be discussed until September 15th.
The new draft rules are a continuation of Beijing's pressure on the IT giants. SAMR has previously imposed various restrictions and fines on technology companies to punish them for anticompetitive and monopoly behaviour. For example, after months of investigation, SAMR fined e-commerce giant Alibaba Group a record $ 2.8 billion for engaging in unfair competition in April.
In July, the regulator forced Tencent Holdings Ltd to terminate exclusive licenses for certain songs on its music streaming service and block the merger of the two-game streaming companies led by Tencent. Chinese tech stocks in Hong Kong fell sharply towards the end of the morning session. Thus, the shares of the gaming company Tencent fell in price by 3.5%, the shares of the online retailer Alibaba - by 2.5%.
Source: SAMR website