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Beijing’s sharp sword hangs over Chinese tech

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Brian Adam
Professional Blogger, V logger, traveler and explorer of new horizons.
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The global backlash against the tech giants has reached China. The antitrust yesterday unveiled a draft that points to “internet platforms.” There’s a lot of room for interpretation, but after the sudden regulatory hiatus of Ant’s IPO, it sounds disturbing.

Beijing is targeting shopping portals, digital payment services, and even food delivery apps. The 22-page draft, which is open for public comment until the end of the month, lists market abuses, such as the misuse of subsidies and discounts, or restricting their customers from selling services on rival platforms, a practice of the one that Alibaba has been accused of by a good number of merchants and competitors.

Jack Ma’s signature seems especially vulnerable. It has enormous force in Chinese ecommerce, but has avoided being formally labeled as dominant by having only a fraction of the total retail market. That may be about to change: the new rules propose to take into account factors such as number of users, clicks and time spent on the platform. In September, Alibaba had 881 million monthly active mobile users, more than half of China’s population.

You may also have other problems. The draft challenges customers to be treated differently based on their consumer preferences and habits. Marketing is a distinctive competency of Alibaba and relies on gathering large amounts of data to help brands reach more consumers. Tencent, Baidu or Pinduoduo could also be affected.

But controlling the giants may not be a neat chore. Alibaba and Tencent have invested billions of dollars in creating other companies and are deeply enmeshed in the Chinese internet economy. This differentiates them somewhat from their Western counterparts. Beijing has procrastinated monopoly policing more than the US or the EU, perhaps assuming it would be easier to regulate a handful of giants. A reckoning will make itself felt.

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