China Unveils New Rules Targeting Anticompetitive Practices by Internet Companies

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Beijing’s latest draft guidelines—part of a recent wave of regulatory action targeting Chinese tech companies—detail prohibited behaviors such as blocking rival products and discriminatory pricing

fell to record lows. The Hang Seng Tech index in Hong Kong, which includes Tencent and Alibaba stocks, has declined some 40% in the past six months.

The market regulator said the new guidelines targeting internet companies were intended to clarify an existing law on unfair competition. China also finalizedAngela Zhang, author of “Chinese Antitrust Exceptionalism” and an associate professor of law at the University of Hong Kong, said the guidelines would allow China’s antitrust regulator to move more quickly to regulate the digital economy.

The list specifically mentions several practices in China’s tech sector that have been the subject of recent regulatory criticism and action, including forced exclusivity and the blocking of competitors’ links.this year over a practice known as “er xuan yi,” or “choose one out of two.” An investigation by Beijing’s top market regulator found the e-commerce company had abused its dominant market position by forcing vendors to exclusively sell on its platform.

Operators would also be banned from charging varying prices for a single product to different consumers based on their transaction history, shopping habits, credit or other personal data that the operators have collected. Chinese companies have rushed to comply with shifting requirements from regulators, pledging to fix outstanding issues and follow new rules. Outside of e-commerce, officials have targeted other industries in their regulatory campaign to rein in businesses

 

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