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SHANGHAI (Reuters) – China moved on Tuesday to tighten control of its technology sector, publishing detailed rules aimed at tackling unfair competition and companies’ handling of critical data.
Beijing has been firming its grip on internet platforms in recent months, citing the risk of abusing market power to stifle competition, misuse of consumers’ information and violation of consumer rights, in a reversal after years of a more laissez-faire approach.
The country issued hefty fines to companies including e-commerce giant Alibaba Group (9988.HK) and social media company Tencent Holdings (0700.HK) as part of a widening crackdown and has vowed to draft new laws around technology innovation and monopolies.
On Tuesday, the State Administration for Market Regulation (SAMR) issued a set of draft regulations banning unfair competition and restricting the use of user data.
New York-listed shares of Alibaba , JD.com Inc and Baidu Inc fell between 2.9 percent and 3.5 percent in premarket trading. Tencent-backed online brokerage Futu Holdings (FUTU.O)slid 7 percent and was among the most actively traded stocks across U.S. exchanges, while peer UP Fintech Holding slipped 3 percent.
Tencent Music Entertainment Group (TME.N)shed 3.8 percent and was set to extend losses for a sixth straight session despite reporting better-than-expected earnings.
“The proposed regulations’ specificity evidences a clear set of priorities in setting the ‘rules of engagement’ for online competition,” said Michael Norris, research and strategy manager at Shanghai-based consultancy AgencyChina.
“If promulgated, the regulations will likely increase compliance burdens for transaction platforms, including e-commerce marketplaces and shoppable short video apps.”
