China has released new anti-monopoly rules to restrict the activities of the country’s major tech companies. China’s market regulator – the State Administration for Market Regulation (SAMR) issued the guidelines on Sunday, February 7, that reinforces antitrust enforcement against monopolistic behaviours in the country’s internet services.
The guidelines issued by the Anti-Monopoly Committee of the State Council aims “to prevent and stop monopolistic behaviors in the platform economy, protect fair competition in the market, promote the orderly, innovative and healthy development of the platform economy, and safeguard consumer interests and social public interests”.
The country’s leading internet services and e-commerce sites such as Alibaba Group’s Taobao, Tmall and JD.com are expected to be affected by the new rules. Moreover, the law will also cover payment services like Ant Group’s Alipay and Tencent’s WeChat Pay.
SAMR had issued the anti-monopoly draft guidelines for online platforms back in November. The new rules are the formalization of the draft rules which limits companies from forcing merchants to choose between supporting specific services and apps. The notice also stated it will cease actions that would fix prices, restrict technologies, and other market manipulation techniques.
“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,” SAMR said.
The market regulator has already initiated one antitrust investigation, looking into the monopolistic practices of Alibaba Group in December following the suspension of its payment affiliate – Ant Group’s initial public offering (IPO) of $37 billion which would have been the biggest public share sale of all time.
The scrutiny from the Chinese regulator has also been linked with Jack Ma, co-founder of Alibaba Group, when he made some controversial remarks over China’s banking system in October 2020, in an event in Shanghai. After that, he was not seen in public for nearly three months until January 20, 2021, when he appeared at a video conference.
The market regulators started making revisions to its antitrust law at the beginning of 2020. Before this, there had not been any amendments in the law since 2008 when the law was issued.