Weekly Newsletter on Chinese Antitrust 12.09-18.09.2022

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Weekly Newsletter on Chinese Antitrust 12.09-18.09.2022
Review №31 on Chinese Antitrust News from BRICS Antimonopoly Centre Expert

- Draft amendments to the law "On cybersecurity"
- Tencent and NetEase's first gaming licenses in a year
- Provisions for the regulation of "pop-up" recommendations
- Food delivery platforms will show the kitchen live
- The growing role of platforms in boosting employment
- Tencent and ByteDance Rank #1 in App Revenue
- China's first public data monopolization case
- Internet giants cut costs
- World's first AI as CEO
- Antimonopoly campaign in the gas industry 

Draft amendments to the law "On cybersecurity"

The draft is submitted for public consultations until September 29th. The explanation notes that under the new conditions, China is constantly reviewing existing and developing new legislation: these are the laws “On Administrative Penalties”, “On Data Security”, “On the Protection of Personal Data”, etc. In order to avoid contradictions and ensure more effective protection of cyberspace, it is proposed to amend the Law “On Cybersecurity”, namely, to increase the amount of fines: for example, for failure to fulfill obligations to ensure security or causing serious harm to it, violation security of key information infrastructure. In particular, operators that have compromised cybersecurity, including by failing to stop the spread of prohibited information, will face a fine of up to ≈$7 million, or 5% of the turnover for the previous year, while now the upper limit is set at ≈$140,000.

Source: GmwSCMP

Tencent and NetEase's first gaming licenses in a year

For the first time since last summer, products from China's gaming industry giants Tencent and NetEase have been licensed by the regulator. On September 13, the State Press and Printing Service approved a new batch of 73 video games, the fifth decision to issue licenses this year. It included the largest number of games, and for the first time in a year, the list was replenished with products developed by the two largest players in the sector. The issuance of licenses was suspended for regulatory purposes back in 2021 and was resumed only in April of this year.

Source: Baijiahao

Provisions for the regulation of "pop-up" recommendations

The regulations are developed by the China Cyberspace Administration, the Ministry of Industry and Informatization and SAMR to prevent the use of pop-ups for illegal information and speculation, the lack of labeling on pop-up ads, the inability to close ads with one click, etc. The regulator, among other things, emphasized that service providers of pop-up recommendations should scientifically establish the percentage of recommended content, strictly control the content of the recommendations, and apply reasonable algorithmic settings.

Source: SAMR

Food delivery platforms will show the kitchen live

The Shanghai Market Regulator has launched the Internet + Transparent Kitchen project: consumers will soon be able to watch the cooking process on food Tencent and NetEase's first gaming licenses in a year Provisions for the regulation of "pop-up" recommendations Food delivery platforms will show the kitchen live Draft amendments to the law "On cybersecurity" delivery platforms live. So they will be able to personally control the quality of the selection and processing of products and all stages of cooking. By the end of 2022, the model will be applied to 1,000 restaurants across the city.

Source: The paper

The growing role of platforms in boosting employment

"Employment is the basis of people's well-being," the State Council of the People's Republic of China said at a permanent meeting. The agency expressed its intention to support the platform economy and provide assistance to start-ups, which in turn will help reduce unemployment. The State Council called flexible employment a "reservoir" and demanded that social subsidies be provided to citizens in need and unemployed for 2 years, university graduates who are involved in flexible employment formats on platforms. For these purposes, special loans will be provided to digital platforms. Experts called the measure very timely: it will help Internet companies increase their confidence in their development prospects and realize the potential for increasing employment. 

Along with this, the Ministry of Human Resources and Welfare, together with the Central Administration of Cyberspace, the Ministry of Transport, SAMR and the All China Federation of Trade Unions, held an administrative seminar for 11 leading platforms (Meituan, Ele.me, DiDi, etc.): the parties discussed guaranteeing the rights of workers, employed in new forms of economy. The authorities confirmed that the platforms have already achieved intermediate success in this direction, but at the same time demanded better fulfillment of program requirements and more active responsibility for the use of labor resources.

Sources: XinhuanetMohrss

Tencent and ByteDance Rank #1 in App Revenue

According to SensorTower, Tencent Holdings and ByteDance are digital China's giants rank first in the world in terms of app revenue for the first half of 2022: $4.4 billion and $1.3 billion, respectively. The report also shows how big the share of the gaming market is occupied by the largest companies: 1% or 460 companies control 93% of the entire market, while the remaining 46,000 enterprises compete for the remaining segment.

Source: SCMP

China's first public data monopolization case

Used car trading company Yuhan AutoSciTech has filed a lawsuit against the CADA Lemon Search app, which offers official data on the condition of vehicles listed for resale. According to Yuhan Auto SciTech, the platform dominates and abuses the used car public data marketplace by offering information at unfairly high prices and discriminating against suppliers that are not members of the industry association. The Beijing Court of Intellectual Property Rights accepted the claim for consideration. This is China's first anti-competitive public data case.

Source: Weixin

Internet giants cut costs

According to Wind, in the first half of 2022, China's top 20 technology and internet companies by capitalization reduced market and management expenses by 13 billion yuan (≈$1.9 billion). In the face of regulatory uncertainty, companies are cutting costs, the article says. For example, the commercial spending rate of food delivery service Meituan and marketplace Pinduoduo were 17.64% and 36.08% respectively, showing a decrease of almost 10 percentage points compared to the same period last year.

Source: Weixin

World's first AI as CEO 

NetDragon Websoft, a Chinese developer of online games and mobile applications, has appointed Ms. Tang Yu, a virtual robot, to the post of CEO. She will oversee the operations of a company worth about $10 billion. tasks and speed up their implementation. It will also act as a data hub and analytics tool to support rational decision-making in day-to-day business and enable more effective risk management. 

“We are convinced that AI is the future of corporate management, and the appointment of Tang Yu demonstrates our commitment and full agreement on the use of AI to transform business management and to actively promote our strategic growth,” said NetDragon CEO Dr. De Jianliu. He said that further it is planned to expand the use of algorithms in order to build an open, interactive and transparent management model and start working on the basis of the metaverse. 

Back in 2017, Alibaba founder Jack Ma said, “In 30 years, it’s likely that a robot will be on the cover of Time Magazine as the best CEO.”

Source: Times

Antimonopoly campaign in the gas industry

During the inspection, the State Council inspection team noted that in Heilongjiang Province, some gas supply providers are forcing consumers to replace gas equipment without fail. In this regard, the provincial market regulator launched a campaign to identify and stop abuses of dominant position in the gas sector. Subordinated authorities are required to study telephone calls, media reports, online documents, as well as conduct field checks to identify facts of coercion to transactions, restrictions on the freedom of transactions or the so-called “loaded sales”. Attention will also be paid to the possible patronage of local authorities in favor of certain gas companies.

Source: Baijiahao

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