Weekly Newsletter on Chinese Antitrust 05.09-11.09.2022

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Weekly Newsletter on Chinese Antitrust 05.09-11.09.2022

Review №30 on Chinese Antitrust News from BRICS Antimonopoly Centre Experts

- Three months of intensified fight against fakes
- TikTok denies data breach
- China is developing the integration of AI into the real economy
- Pinduoduo launches cross-border marketplace
- Alibaba establishes Technology Ethics Committee
- Apple to donate to earthquake victims
- SEC warns about the risks of auditing Chinese companies
- Compliance Seminar in Zhejiang Province
- Shortage of 3 million cybersecurity professionals by 2027
- SCMP: Foreign companies in China are 'hiding in anticipation'
- The taxi aggregator market is expanding
- A book about the development of the digital economy

Three months of intensified fight against fakes

On the eve of the 20th Congress of the Communist Party, the Cyberspace Administration of China launched a nationwide campaign to combat rumors and fakes on the Internet. As part of the campaign, which will last 3 months, the department will fight the spread of new and the re-emergence of old rumors. Work will be launched to monitor, identify, refute and eliminate false information. The administration also plans to increase the subjective responsibility of platforms and toughen penalties for creating and spreading fakes. Fake events associated with significant meetings, events and program measures will be especially strictly suppressed. Platforms will be required to use technical tools to trace the source and apply penalties, including a warning, disabling functions and permanent blocking. For especially malicious violators, punishment is provided in the form of a ban on registering new accounts throughout the Internet.

Source: GMW

TikTok denies data breach

Short video service TikTok denied the hackers' claim that they had access to the source code and user data. Earlier, the hacker group AgainstTheWest reported that it had hacked the TikTok server with 2 billion records and huge amounts of sensitive information. A TikTok spokesperson commented that the company's security team found no evidence to support the hack: "We found that the data samples in question were in the public domain and are not related to breaches of TikTok's systems, networks or databases. <…> We do not believe that users need to take any proactive action, and continue to stand guard over the safety and security of our global community.”

Source: Nypost.com

China is developing the integration of AI into the real economy

In the past decade, China has been promoting the deep integration of artificial intelligence and the real economy, according to the People's Daily. At the end of 2021, the volume of the main industries in the field of AI exceeded $57.70 billion, an increase of more than 6 times compared to the same period in 2019. “AI is increasingly integrated with various fields such as manufacturing, transportation, medical care, agriculture, and continues to promote quality, efficiency and power, constantly giving new impetus to high-quality economic development,” said the director of the China Academy of Information and Communication Technology (CAICT). ) Yu Xiaohui. To promote the development of AI, China has stepped up government support, published a Next-Generation AI Development Plan, and added the goal of "develop AI" to the country's 14th Five-Year Plan. International cooperation in the field of digitalization is also increasing: MoUs have been signed with 17 countries on cooperation in creating the "Digital Silk Road", a mechanism for cooperation in the development of the "E-commerce Silk Road" has been established with 23 countries, and China recently applied to join the Partnership Agreement in areas of the digital economy.

Source: Russian.people

Pinduoduo launches cross-border marketplace

Marketplace Pinduoduo has launched a cross-border marketplace Temu - sales on it will officially open on September 16th. The platform will first launch in the US: its model is built by analogy with the largest cross-border Chinese marketplace SHEIN, but the difference is that, in addition to clothing, Temu also offers other product categories. Merchants will receive various discounts and benefits upon registration and will deliver goods to the Pinduoduo warehouse, while the platform will independently handle the selection, pricing and delivery.

Now, all three of China's largest e-commerce giants (Alibaba, JD.com and Pinduoduo) offer their services to the international market. As experts emphasize, China offers advanced online trading models, and by using the country's productive capacity, Chinese merchants can successfully master the vast international space.

Source: Baijiahao

Alibaba establishes Technology Ethics Committee

The Alibaba Technology Ethics Committee will develop and implement AI ethics frameworks in key areas, including algorithm management and privacy protection. The committee will include seven independent experts in technology, law and philosophy. “The Technology Ethics Committee is set to be the gatekeeper of technological innovation,” said Alibaba CTO Cheng Li, who will take over as chairman of the committee. The committee has already proposed six key principles for the development of AI technologies: human-centeredness, inclusiveness + integrity, security + reliability, privacy protection, be trustworthy and calculated, openness + collaboration.

Cheng Li Interview on Technological Ethics Regarding AI

Apple to donate to earthquake victims

Apple CEO Tim Cook said on the Chinese Weibo microblog: “Our hearts go out to all the families and communities affected by the earthquake in Sichuan. Apple will make a donation to support ongoing recovery and remediation efforts." Many Chinese companies have already made donations of money or goods totaling more than $4 million, including Alibaba Group, Tencent, Xiaomi, and others. Charity is an important part of the business development strategy in China, through which companies increase their value to society. 

On September 5th, a magnitude 6.8 earthquake struck Sichuan province, with more than 80 deaths and 270 injuries reported.

Sources: Weibo, Global Times

SEC warns about the risks of auditing Chinese companies

According to Reuters, the US Securities and Exchange Commission (SEC) warned US auditors that by agreeing to audit Chinese and Hong Kong companies listed on the US exchanges and wishing to avoid potential delisting, they run the risk of violating US law. Fearing that China will not allow the American regulator to read their financial statements, some Chinese companies are changing their local auditor to an American or other foreign one. Such actions present special challenges and raise the question of whether these new auditors - whether located in the US or elsewhere - will be able to bear the responsibility that comes with the status of lead auditor, notes acting. Head of the Financial Department of the US Securities and Exchange Commission (SEC) Paul Manter.

Sources: Reuters, The CLS Blue

Compliance Seminar in Zhejiang Province

The Zhejiang market regulator held a seminar on antitrust compliance for companies whose shares are traded on the stock exchange. The event was hosted by leading experts in competition law, including staff from Shanghai Transport University (Shanghai Jiaotong). The seminar was attended by all 647 public companies in the province, representing a range of industries, including the platform economy, biomedicine, electronics, scientific technology, utilities, and more. The market department noted the need to clearly understand the important role of competition law in the legal system of socialism with Chinese characteristics, introduce competitive compliance into regular corporate activities, and conduct appropriate training and certification.

Source: SAMR

Shortage of 3 million cybersecurity professionals by 2027 

According to the Ministry of Education of the PRC, by 2027, China will have a shortage of 3.27 million cybersecurity specialists. The white paper prepared by the department indicates that 34 Chinese universities have already launched professional training in the direction of "Cyberspace Security", but they are able to graduate only 30 thousand specialists a year. At the same time, the process of digitalization is constantly accelerating, the boundaries of cyberspace are becoming increasingly blurred, and the risks of cyber attacks are growing, which creates an increased demand for such skills.

Source: Xhby

SCMP: Foreign companies in China are 'hiding in anticipation'

Amid tough anti-epidemic measures, supply chain instability and geopolitical conflicts, many foreign companies, although they do not want to leave China, also do not intend to increase investment, according to an article by the South China Morning Post. Jörg Uttke, President of the EU Chamber of Commerce in China, said that China's measures to control the spread of COVID-19 show that Beijing is putting ideological factors at the forefront to the detriment of the economy. Nevertheless, it is noted that the investment climate depends on the industry: for example, many are actively investing in the production of electric vehicles. The Chinese Ministry of Commerce, for its part, notes that, despite foreign media reports, the country is still an attractive investment destination.

Source: SCMP

The taxi aggregator market is expanding

Huawei has launched a test version of the Petal Travel taxi aggregator. On Huawei phones, it is available even without downloading the application: with a quick search, the system automatically launches a mini-program. Popular online taxi ordering platforms in China, including T3 Chuxing, have already connected to the aggregator. Earlier, in July, a built-in Transport Travel aggregator was also made available on WeChat, which also features major platforms in the sector. 

On August 22nd, regulators held a meeting with 11 platforms, where they noted that taxi aggregators are required to monitor the compliance of services offering their services on their sites and encourage such services to more effectively manage the cars and drivers provided.

Source: Weixin

A book about the development of the digital economy 

The Law Institute of Nankai University, in collaboration with Social Science Academic Press, has published The Normative Development of Digital Economy Advanced by the Rule of Law, which discusses high-profile issues in the digital sector: the fight against monopolies, interoperability, flexible forms of employment on platforms, etc. The author of the book is the director of the Center for the Study of Competition Law at Nankai University Chen Bin, who is engaged in in-depth study of economics, data and artificial intelligence from the point of view of law. The book argues that the fight against unfair competition should increase the confidence of market actors - situations should be avoided when enforcement hits their innovative potential.

Source: Weixin

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