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China鈥檚 tech giants face new anti-monopoly rules

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Alibaba and Ant Group logos on a wallImage source, Getty Images
Image caption,

Alibaba and Ant Group logos on a wall

New anti-monopoly rules for China's tech giants were introduced on Sunday.

The guidelines, which formalise draft laws released in November, come as regulators try to crack down on anti-competitive behaviour.

The rules are aimed at stopping China鈥檚 e-commerce giants Alibaba and JD.com from abusing their dominant market position.

Specifically, the rules stop e-commerce platforms from forcing vendors to deal exclusively with them.

China鈥檚 State Administration for Market Regulation (SAMR) wants to stop price-fixing, predatory pricing and unreasonable trading conditions.

There are also rules against restricting technologies and using data and algorithms to manipulate the market.

The guidelines will also apply to financial technology and payments companies such as Tencent鈥檚 WeChat Pay and Ant Group, Alibaba鈥檚 payments affiliate.

SAMR said reports of anti-competitive behaviour had been increasing, and that it was facing challenges regulating the industry.

鈥淭he behaviour 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,鈥 SAMR said.

Tougher approach

The new rules come into effect as China takes a firmer line against alleged anti-competitive behaviour.

On Monday, SAMR announced it had fined online discount retailer Vipshop nearly $500,000 (拢364,000) for unfair competition.

Media caption,

How a little Ant became a financial giant

Between August and December last year, the retailer had developed a system to obtain information on brands it and competitors sold, which gave it an advantage.

The regulator said Vipshop used its system to influence user choices and transaction opportunities and to block sales of particular brands.

SAMR is also currently carrying out an antitrust investigation into Alibaba, which it first announced in December.

The investigation followed Ant Group鈥檚 decision to drop a planned $37bn share market launch after regulators intervened.

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