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As online retailers prepared for Singles Day, China put forward antitrust regulations that would limit the powers of Alibaba, Tencent and other Chinese tech giants.
While major US tech companies continue to face scrutiny from their own government and the EU, China is lining up plans to limit the power of its own internet giants. According to the BBC, China’s government is becoming wary of the increasing power companies such as Alibaba, JD.com and Tencent have in its economy and society.
A 22-page draft by the State Administration for Market Regulation (SAMR) has been created to clearly define antitrust behaviour within the Chinese tech sector. It includes provisions that would prevent companies from sharing consumer data, underselling products and teaming up to take out smaller competitors.
Businesses would no longer be able to enter into exclusive arrangements with tech companies, should the proposal become law, and tech companies would not be able to give customers more favourable treatment based on their spending or data habits.
The SAMR has now begun the process of seeking a review of the proposal by the public, which will conclude at the end of this month.
Shares tumble
The news comes as China’s e-commerce giants mark Singles Day, an unofficial Chinese shopping holiday when millions of products are discounted and sold online. This year, Alibaba has achieved record sales of more than $56bn in the event so far.
Alibaba and JD.com dominate online retail in China, making up approximately three-quarters of the entire e-commerce market. The Chinese government recently raised concerns about Alibaba’s fintech affiliate, the Ant Group, with regulators suspending its stock market launch over “major issues” such as changes in the financial technology regulatory environment.
Shares in many of the companies likely to come under scrutiny by the SAMR saw their share value drop after the proposal was announced, with Alibaba, JD.com, Tencent, Xiaomi and Meituan losing more than $200bn in combined value, according to BBC.
Meanwhile, the European Commission this week informed Amazon of its preliminary view that the company breached antitrust rules with relation to its use of marketplace seller data. It found that the company’s access to non-public business data from independent sellers on its marketplace can benefit its own retail business.
