Anti-trust guidelines for Internet platforms

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The new rules formalize an earlier anti-monopoly draft law released in November, and clarify a series of monopolistic practices that regulators plan to crack down on.
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The State Council, China’s Cabinet, on Sunday unveiled anti-trust guidelines that target Internet platforms to ensure fair market competition and promote the innovative and healthy development of the sector.

The new rules formalize an earlier anti-monopoly draft law released in November, and clarify a series of monopolistic practices that regulators plan to crack down on.

The guidelines are expected to better regulate the country’s leading Internet services, including e-commerce sites such as Alibaba Group’s Taobao and Tmall marketplaces or JD.com. They will also cover payment services like Ant Group’s Alipay or Tencent Holding’s WeChat Pay.

The rules, issued by the State Administration for Market Regulation on its website, bar companies from a range of behavior, including forcing merchants to choose between the country’s top Internet players, a long-time practice in the market.

SAMR said the latest guidelines would “stop monopolistic behaviors in the platform economy and protect fair competition in the market.”

The notice also said it will stop companies from price fixing, restricting technologies and using data and algorithms to manipulate the market. In a Q&A accompanying the notice, SAMR said reports of Internet-related anti-monopoly behavior had been increasing, and that it was facing challenges regulating the industry.

“The behavior is more concealed, the use of data, algorithms, platform rules and so on make it more difficult to discover and determine what are monopoly agreements,” it said.

China has in recent months started to tighten scrutiny of its tech giants. In November 2020, the SAMR issued the anti-monopoly draft rules for online platforms and made it open for public consultation. A month later, the Central Economic Work Conference for 2021 reiterated the pledge to strengthen anti-monopoly efforts to rein in “disorderly expansion of capital.”

China started the process to make revisions to its antitrust law in 2020 since it took effect in 2008, with major changes on regulating abuse of market dominance.

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