China’s crackdown on technology is widespread

It’s been less than a week since Chinese regulators haven’t accused tech companies of alleged breaches, from inconsistent pricing to invasion of user privacy to difficult working conditions. In May, Chinese cyber regulators accused 105 apps, including short videos and recruitment apps, of illegally collecting and using personal data. If you do not resolve the issue within 3 weeks, you risk taking legal action.

The directive was issued a few days after an additional 117 apps were instructed to fix user data issues. Regulators are also facing ride-hailing services for possible mistreatment of drivers, while Internet companies are being ordered to reform data and lending practices. Authorities have also criticized delivery platforms, which they consider to be fraudulent pricing strategies.

For tech companies, being summoned to meet with regulators generally gives tech companies the opportunity to resolve issues instead of initiating a public investigation, according to people familiar with the investigation. Inform citizens and investors. This has caused some tech companies to crave their turn and put a strain on investigators, according to people familiar with the matter.

China’s purpose is “to encourage businesses to comply with regulatory requirements without formal intervention,” said Angela Chan, an associate professor of law at the University of Hong Kong, entitled “China’s Antitrust Exceptionalism.” Wrote the book.

China’s mobile app regulations have previously focused on cracking down on controversial and inappropriate content. We continue to crack down on such content on social media. Xiaohongshu, a popular social media and e-commerce app, is the latest to be investigated by Internet regulators after posting a message on Weibo like Twitter on the anniversary of the Tiananmen Square Incident last week. 1989 crackdown on Tiananmen Square and closure of its account, The Wall Street Journal reportedOn the other hand, the latest regulations cover a wider range of violations, many of which have long been regarded as the norm in booming and under-supervised industries.

China is one of the countries with the shortest history of antitrust regulation in the major world economies and has historically used antitrust laws to curb the market impact of foreign companies. .. Domestic Internet companies were largely neglected as China sought to foster its own technology industry.

It started to change at the end of last yearWhen the initial public offering of financial technology giant Ant Group was canceled days after its controlling shareholder, Mr. Ma, gave a speech that infuriated government leaders. In December, China began an investigation.

Alibaba Group Holding Co., Ltd.

Baba 0.91%

, Mr. Ma also co-founded.

In April, regulators Impose a record $ 2.8 billion By fined Alibaba and engaged in “er xuan yi” (literally translated as “choose one of the two”), it was determined to have abused its dominant market position. The accusations have plagued China’s e-commerce industry for years, causing public complaints and proceedings, but with little solid evidence.

China’s largest market regulator Antitrust law investigation started To the food delivery giant

Meituan score

3690 -1.69%

With the same tactics. Meituan has stated that it will cooperate with the investigation and its business will continue to operate normally.

“The government wants to send a very clear message to all these tech conglomerates that it is the government that is responsible,” said Mark Natkin, managing director of Beijing-based industry research firm Marbridge Consulting. Said. “Otherwise, no concept is ultimately acceptable.”

The warning, with the exception of Ant, has not yet required a complete overhaul of the enterprise. For some companies, soothing Chinese authorities is a matter of fine-tuning some app features, while others rely on data collection and sharing for much of their profits. According to employees of five app companies targeted by regulators last month, it could be more affected.

Some employees say they are becoming more cautious about compliance and what may be considered a violation of regulation. ByteDance Ltd., which owns the short video app “Douyin” targeted for inappropriate data collection, hires compliance and legal experts to check user conditions and various features of the app to check for rule violations. Employees said they were tasked with reviewing. ByteDance declined to comment.

Local agencies are also more involved in cracking down on technology platforms, Zhang said.

The Shanghai Market Regulatory Authority recently fined Alibaba-owned shipping app Ele.me for violating Chinese price and food safety laws by yuan, or about $ 78,000. Alibaba did not respond to requests for comment.

Shanghai Consumer Protection Commission said it interviewed Meituan and an e-commerce startup

Pin duo duo Co., Ltd.

In May, it is related to issues such as misleading online claims, product quality, and non-delivery. Meituan and Pinduoduo did not respond to requests for comment.

Chinese regulators are calling on the public to monitor the behavior of tech companies. Regulators have announced that many of the recent warnings are based on user complaints.

“These complaints have been going on for a long time and have inevitably led to actions to protect consumers and small businesses,” said Allen & Aubrey, Partner and Head of Antitrust Practices in Greater China. François Leonard said. “Of course, what’s very impressive is that everything happens at the same time.”

Last month, eight government agencies, including the Ministry of Transport and Public Security of China, summoned eight transportation companies, including Didi and Meituan, a major rider.

Didi did not respond to requests for comment. The company details the pricing mechanism.

WeChat

Posted in May and thanked the public for its director and criticism.

Technology companies have responded to criticism by pledged to be good corporate citizens.

In its earnings announcement on May 28, Meituan CEO Wang Xing said the company has set up a team to cooperate with regulators’ investigations and continues to address social responsibility.King Donated shares worth HK $ 17.3 billion, Or an amount equivalent to $ 2.3 billion was submitted to his private foundation on Thursday. The donation will fund projects related to education and scientific research, Meituan said.

During April

Tencent Holdings Co., Ltd.

TCEHY 1.53%

Ma Huateng, CEO, said the company will secure $ 7.7 billion to fund projects such as public welfare, rural revitalization and carbon neutrality. Gaming and social media giants have been pointed out by regulators this year on issues such as the risk of financial services and the lack of proper reporting of past acquisitions.

“If we leverage our technology and products to deliver greater social benefits, we believe that overall we will be better accepted by our users, customers, government and employees,” said Martin, President of Tencent. Lau talked about profits. Called last month.

— Keith Zhai and Raffaele Huang contributed to this article.

Write to Stephanie Yang [email protected]