China released new anti-monopoly guidelines for its platform economy

China’s State Administration for Market Regulation (SAMR)

China’s market regulator released new anti-monopoly guidelines on Sunday that target internet platforms, tightening existing restrictions faced by the country’s tech giants.

The guidelines, which finalize drafted legislation originally released in November, are likely to pressure firms such as Alibaba, JD.com, Ant Group and Tencent which dominate e-commerce in China. They will also cover payment services like Ant Group’s Alipay or Tencent Holding’s WeChat Pay. 

China’s State Administration for Market Regulation (SAMR) issued the rules on its website, banning companies from a range of behavior, including forcing merchants to choose between the country’s top internet players, a long-time practice in the market.

SAMR said the latest guidelines would prevent and stop monopolistic behavior in the platform economy, guide operators to operate in compliance with laws and regulations, and promote the sustainable and healthy development of the online economy.

The notice also said it will stop companies from price fixing, restricting technologies and using data and algorithms to manipulate the market.

SAMR said reports of internet-related anti-monopoly behaviour had been increasing, and that it was facing challenges regulating the industry. The use of data, algorithms, platform rules and so on make it more difficult to discover and determine what are monopoly agreements. 

China has in recent months started to tighten scrutiny of its tech giants, reversing a once laissez-faire approach.

In December, regulators launched an antitrust investigation into Alibaba Group following the dramatic suspension of the $37 billion initial public offering plan of its payment affiliate, Ant Group.

Damon Harrison
Market Analyst, IPG Group