The rules may put pressure on companies such as Alibaba, JD.com, Ant Group and Tencent, which dominate e-commerce in China.
The Chinese market regulator has launched new antitrust guidelines for internet platforms, tightening existing restrictions facing the country’s technology giants.
The new rules, published on Sunday, formalize a previous antitrust law launched in November and clarify a number of monopolistic practices that regulators intend to crack down on.
The guidelines are expected to put new pressure on major e-commerce sites in the country, such as Alibaba Group’s Taobao and Tmall markets and JD.com. They will also cover payment services such as Alipay Ant Group and WeChat Pay from Tencent Holding.
The rules, issued by the State Administration for Market Regulation (MRSA) on its website, exclude companies from a range of behaviors, including forcing traders to choose between the country’s top internet players, a long-standing market practice. .
SAMR stated that the latest guidelines will “stop monopolistic behavior in the platform economy and protect fair competition in the market”.
The opinion also says it will stop companies from setting prices, restricting technologies and using data and algorithms to manipulate the market.
In an explanation of questions and answers accompanying the notification, MRSA said reports of internet-related antitrust behavior had increased and faced challenges in the industry.
“Hidden” behavior
“Behavior is more hidden, the use of data, algorithms, platform rules and so on make it more difficult to discover and determine what monopoly agreements are,” he said.
In recent months, China has begun tightening control over its technology giants, reversing a laissez-faire approach.
Chinese authorities shut down Ant Group’s initial $ 37 billion public offering in November over antitrust concerns [File: Qilai Shen/Bloomberg]
The Chinese Politburo, the main decision-making body of the Communist Party, pledged at a meeting late last year to step up antitrust efforts in 2021. Less than two weeks after the meeting, China began an investigation into Alibaba Group Holding Ltd. in December for alleged monopolistic practices.
These moves followed the dramatic suspension of the initial $ 37 billion public offering plan by its payment affiliate, Ant Group.
At the time, regulators warned the company about practices that include forcing merchants to sign exclusive co-operation pacts to the detriment of other internet platforms.
Competition lawsuits have been filed by companies even as regulators step up control.
ByteDance Ltd filed a lawsuit last week against Tencent Holdings Ltd for alleged monopolies in its WeChat and QQ platforms, escalating a conflict between two Chinese social media giants. A Beijing court has agreed to hear the case, a ByteDance representative confirmed to Bloomberg news agency on Sunday.
The first blow
In one of the first uses of their new expanded arsenal of rules, Chinese regulators hit online discount retailer Vipshop Holdings Ltd with a fine of 3 million yuan ($ 464,000), the largest so far in the recent cut. .
As a sign that regulators are increasingly willing to use more tools to curb monopolistic behavior in the technology sector, Vipshop has been punished for violating a law banning unfair competition, which allows fines of up to 5 million yuan. .
By comparison, other firms that have been hit with sanctions since the end of last year have been fined under China’s antitrust law of 2008, which allows for a maximum fine of much less than 500,000 yuan ($ 77,323).
SAMR said on Monday that from August to December last year, Vipshop developed a system to obtain information about brands that gave Vipshop a competitive advantage. He added that Vipshop used its system to influence user choices, transaction opportunities and to block sales of certain brands.
New York-listed Vipshop, which has a market value of about $ 22 billion, said Monday that it has accepted the MRSA conclusions and will strengthen compliance.