China on Sunday put into effect new antitrust guidelines targeting internet platforms, subjecting the countryโs tech industry to tougher rules on competition.
Why it matters:ย The guidelines formalize earlierย draft rulesย announced by Chinaโs State Administration for Market Regulation (SAMR), the nationโs top trustbuster.
- Some of the countryโs top internet-based services, including Ant Groupโs Alipay, food delivery app Meituan, Tencentโs instant-messaging app WeChat, and online marketplace Taobao, will be subject to the new guidelines.ย
Details:ย The new rules forbid internet platforms from forcing merchants intoย exclusivity deals, offering different prices based on user data, and using algorithms to manipulate the market.
- Pricing products or services differently according to customer purchasing power, consumption history, or user preference is now considered monopolistic behavior, according to the guidelines.
- The guidelines widen the parameters for determining a firmโs โmarket-dominant positionโ to include factors such as transaction volume, user base page views, and technological barriers.ย
- SAMR, which issued the rules, said the guidelines will provide aย legal basisย (in Chinese) for the country to tighten antitrust regulation of internet platforms.
Context:ย In December, SAMRย issuedย fines to Alibaba and affiliates of Tencent and logistics giant SF Express over three separate acquisition deals, a move that legal experts described as the countryโs first batch of antitrust enforcements against tech firms.
- SAMR in January 2020 proposed anย overhaulย of the countryโs Anti-Monopoly Law to include internet firms in the scope of antitrust regulations.
- Last week, Douyin, ByteDanceโs Chinese version of TikTok, said it hadย suedย Tencent for monopolistic behavior including blocking Douyinโs content on WeChat.
