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China ramps up efforts to clamp down freewheeling tech firms

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Beijing | June 7, 2021 8:14:39 PM IST
Claiming a crackdown on anti-competitive practices among Chinese internet giants, Beijing has ramped up a broader effort to clean up the operations of the country's fast-growing and freewheeling tech sector.

Every week, Chinese regulators have been calling out tech companies for alleged offences, including inconsistent pricing, user privacy concerns and difficult working conditions, reported The Wall Street Journal (WSJ).

In May, China's cyber regulator accused 105 apps, including short-video and job-recruitment apps, of illegally collecting and using personal data and ordered the companies to fix their problems within three weeks or risk legal action.

Chinese regulators have also met with ride-hailing services for potential mistreatment of drivers, while internet firms have been ordered to reform their data and lending practices. Delivery platforms in China have also come under the scanner over what the authorities view as deceptive trading practices.

China continues to crack down on social media content it deems 'controversial'. Xiaohongshu, a popular e-commerce startup, is the latest to be probed by internet regulators after it posted a message on the Chinese microblogging site Weibo on the anniversary of the 1989 Tiananmen Square massacre and had its account shut down, WSJ reported.

Beijing has been infamous for using antimonopoly rules to curb the market influence of foreign firms, As it sought to nurture its own tech company, the scenario changed when financial-technology giant Ant Group's initial public offering (IP) was canceled last year, days after businessman Jack Ma made a speech that infuriated the government leaders.

In April, regulators imposed a whopping USD 2.8 billion fine upon Alibaba, stating that it had abused its dominant market position by engaging in a controversial practice,. Such accusations have dogged China's e-commerce industry for years, resulting in several public complaints and lawsuits.

For some companies, placating Chinese authorities is a matter of tweaking some app features, while others could suffer more if much of their profits rely on data collection and sharing, WSJ reported citing employees of five app companies.

Some employees said they have grown more cautious about compliance and anything that could be seen as going against regulation. ByteDance, whose short-video app Douyin was among those targeted for improper data collection, has been hiring compliance and legal experts, tasking them with reviewing user terms and various app features to check for rule violations.

Chinese regulators have also called on the nation's citizens to help supervise the behaviour of tech companies Tech companies have responded with pledges to be good corporate citizens. (ANI)

 
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