Alibaba’s Taobao, Tencent’s WeChat Pay, More Chinese Tech Giants Face New Anti-Monopoly Guidelines

China’s new rules formalise an earlier anti-monopoly draft law released in November.

By Reuters | Updated: 8 February 2021 12:55 IST

Alibaba’s Taobao, Tencent’s WeChat Pay, More Chinese Tech Giants Face New Anti-Monopoly Guidelines

In December, regulators launched an antitrust investigation into Alibaba Group

Highlights

Guidelines are expected to put new pressure on China's internet services
They will also cover payment services like Ant Group's Alipay
Rules are issued on State Administration for Market Regulation's website

China's market regulator released new anti-monopoly guidelines on Sunday that target Internet platforms, tightening existing restrictions faced by the country's tech giants.

The new rules formalise 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 put new pressure on 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's WeChat Pay.

The rules, issued by the State Administration for Market Regulation (SAMR) on its website, bar companies from a range of behaviour, 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 behaviours 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 behaviour had been increasing, and that it was facing challenges regulating the industry.

"The 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," it said.

China has in recent months started to tighten scrutiny of its tech giants, reversing a once laissez-faire approach.

In December, regulators launched an antitrust investigation into Alibaba Group following the dramatic suspension of the $37 billion (roughly Rs. 2,77,000 crores) initial public offering plan of its payment affiliate, Ant Group.

At the time, regulators warned the company over practices including forcing merchants to sign exclusive cooperation pacts at the expense of other Internet platforms.

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