China Going To Clamp Done On Biggest Internet Giants
United States and European Union Are Also Raising Concerns over Giant Digital Marketing Platforms
The Chinese government has recently announced a proposal that contains new regulations which are directly aimed to curb the power of its biggest internet giants in the country. The new regulation implemented suggests an escalating unease in China with the rapidly rising influence of digital platforms between the general public inside the nation.
Although the new rules would be beneficial for the country, it could negatively affect the homegrown tech internet giants like Tencent, Ant group, and Alibaba, as well as the Chinese-made food delivery platform Meituan.
This new implementation of new rules and regulations has been done by China as the European Union, and the United States are also looking towards curbing the increasing power of the internet giants. As soon as the regulatory proposal wave made public on Tuesday, the stock shares of the Chinese internet giants were observed to have sharply lowered.
The news was publicized soon before as tech firms like Alibaba and JD.com were getting ready for the upcoming Singles Day sale, the one-day annual sale, which is the biggest bargain sale day celebrated by the websites. The sell-off continued even on the next day, with internet giant tech companies including Xiaomi, Tencent, JD.com, Meituan, and Alibaba all headed lower, and at the end of the day, lost more than $200 billion with their combined worth.
The State Administration for Market Regulation (SAMR) provided twenty-two pages long draft as part of the first attempt to define the new regulatory anti-competitive behavior for the internet giants of the tech sectors. These recently implemented regulations will now attempt to prevent the internet giant firms from sharing any private or sensitive information regarding the customer, along with forming teams to eliminate other small scale rival firms and selling at a loss to remove other competitive companies.
The new controlling regulations by China would also stop internet giant platforms that are forcing other businesses to sign exclusive arrangements with them, which is something Alibaba has already been accused of by their competitors and merchants. It would also target those companies that treat their customers discriminately and differently due to their spending habits and personal data.
To prevent any complaints from the public in the future, the SAMR is now also seeking public feedback and reviews regarding their anti-trust guidelines for internet giant businesses by the end of the month of November.
Dominancy of Internet giants
JD.com and Alibaba have currently been dominating the online retail marketplace of China and have together been estimated to have accounted for around three-quarters of eCommerce of China. As of the month of September, Alibaba was able to increase 881 million mobile monthly active users, which is around more than 50% of the total population of China.
Another concern has been raised in Beijing regarding an affiliate company of internet giant Alibaba named Ant Group, which has pulled its stock market launch in the previous week after concerns were raised by the regulators regarding the escalating power of the lenders available online and how it could possibly affect the financial system on a broader spectrum.
The offering by the Share market was possibly the world’s largest. The Ant Group has about 1.3 billion users, most of which are located in China, where it runs Alipay, which is the nation’s most dominant payment method for digital transactions.
The Chinese internet giant Tencent, which also has a competitive, secure digital payment system along with being the largest gaming firm across the world, could also possibly come under scrutiny.
Chinese authorities are not the only ones concerned regarding the rapidly explosive growth and development of some of the internet platforms, although they are not alone. The European Union has also announced to take anti-trust charges against the internet giant Amazon and accuses the business of abusing their power and influence in markets of France and Germany.