China drafts new antitrust guideline to rein in tech giants

Draft guideline ‘targeting tech giants’ in e-commerce, online food delivery and ride hailing

by Yujing LiuDaniel Ren,SCMP

Published: 1:45pm, 10 Nov, 2020

China has released a draft antitrust guideline to rein in internet-based monopolies, signalling policymakers’ heightened concerns over the growing power, influence and risks of digital platforms and their market practices in the economy.

Monopolistic practices by internet platforms, such as demanding vendors to transact only on one platform exclusively, or providing differentiated prices to customers based on their shopping history and profiles, could potentially be outlawed, according to the guideline released by the State Administration for Market Regulation on Tuesday.

This is the first time the market regulator has attempted to define what constitutes anti-competition practices among internet companies under the law. An overhaul to the Anti-Monopoly Law in January went only as far as tweaking the language to encompass internet companies. It will seek public opinion on the draft until the end of November.

The guideline also deems activities like platforms offering steep discounts to eliminate rivalry, colluding on sharing sensitive consumer data, and forming alliances to force out competitors, as potentially monopolistic.

The latest move has put China watchers on alert as Beijing appears to start clipping the wings of some of the biggest companies that helped revolutionise consumer spending behaviour in the world’s second-largest economy.