Wuzhen, China, Nov 25, 2020 – China’s annual World Internet Conference is usually a forum for luminaries from the country’s online giants and government bodies to discuss pressing issues of the day.
But this year, few people spoke of what is expected to be a seismic shift for the industry – plans by the central government announced just this month that aim to rein in a slew of anti-competitive behaviors.
The plans have been described by analysts as the first serious attempt on the part of Beijing’s antitrust authorities to regulate the tech companies whose services pervade Chinese daily life, particularly Alibaba Group Holding Ltd and Tencent Holdings Ltd.
But despite the presence of top officials including the head of the Cyberspace Administration of China, Zhuang Rongwen, and Liu Liehong, vice minister for industry and information, as well as executives from a raft of tech firms, the sensitive topic was barely broached in speeches and panel discussions.
The lone person to touch on it in a keynote speech was Alibaba CEO Daniel Zhang, who called the tightening oversight “very timely and necessary”.
Regulatory ire in China can be fierce and drastic in its consequences. This month regulators slammed the brakes on Ant Group’s $37 billion IPO, thwarting the world’s largest stock market debut just days ahead of its launch and marking a stunning rebuke for Ant and Alibaba founder Jack Ma.
According to the 22-page draft guidelines, Chinese authorities will be looking to curb the unfair use of discounts and subsidies and the use of restrictions placed on businesses that prevent them from selling their goods and services on other platforms.
Regulators have also separately said they are seeking to strengthen oversight of consumer rights and data protection, which will also affect internet companies.
For some observers, greater regulation is a natural development given that incumbent tech giants can prevent rival start ups from thriving.
“When two giants are dominating lots of aspects of the Chinese market, how can others grow?,” Wang Yiwei, professor of international studies at Renmin University in Beijing, said on the sidelines of the conference. – Reuters