ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
China tech

China launches 6-month intensive campaign to set Big Tech straight

Enforcement action follows sweeping investigation into Didi

The Chinese government plans a six-month crackdown on tech companies including Alibaba and Tencent. (Photo by Shunsuke Tabeta)

BEIJING -- China will engage in a concerted effort over the next six months to police the technology sector over improper antitrust and consumer protection practices, government officials said Monday.

The Ministry of Industry and Information Technology held a meeting that officially kicked off the action plan to collect information on corporate misdeeds, list specific problem areas and hold offenders legally responsible. Technology companies will be told to launch internal probes in order to correct practices that violate the law and other directives.

The move follows the wide-ranging investigation of Didi Global initiated shortly after the ride-hailing leader listed on the New York Stock Exchange. The Chinese government appears to be expanding the regulatory backlash against the larger domestic tech industry as a whole.

The six-month crackdown will focus on four areas: adherence to the anti-monopoly law, protecting users, safeguarding data and obtaining official authorization to operate.

For example, tech companies will no longer be allowed to maintain an anticompetitive advantage by blocking links to nonaffiliated websites. In the interest of consumer protection, they will be barred from deceptively directing users to sponsored sites through the use of pop-ups with false "close" windows.

Data protection will be enforced by having tech organizations encrypt users' private information and by requiring consent before transferring data to a third party. Authorities will also crack down on so-called black broadband networks that operate without the government's permission.

The IT ministry held a teleconference on Friday marking the launch of the six-month "rectification" program, according to Monday's announcement. This is part of the ongoing effort by President Xi Jinping's government to tighten its grip on the tech industry.

Didi debuted on Wall Street at the end of June, raising $4.4 billion in its initial public offering. Days later, China's Cybersecurity Review Office announced a cybersecurity investigation into the company.

Beijing later ordered the ride-hailer's consumer apps to be removed from Chinese app stores, and the company was blocked from signing new users. A team including members from seven national regulators was dispatched for an on-site raid.

Elsewhere, authorities this month slapped fines on a slew of tech companies for embarking on unauthorized acquisitions. E-commerce leader Alibaba Group Holding, for one, was punished for failing to submit applications for past share purchases.

That same month, the State Administration for Market Regulation, the antitrust watchdog, blocked chat and gaming giant Tencent Holdings from merging two gameplay streaming sites under its umbrella. The agency later barred Tencent from engaging in exclusive music copyright agreements with upstream owners and ordered existing agreements dissolved.

With the frictions between the U.S. and China intensifying in the high-tech sector, Beijing has kept a for eye data leaks into the U.S. The new Data Security Law, which goes into effect in September, will go hand-in-hand with other mandates to safeguard the country's internet security.

China had previously relied on its "great firewall," which monitored cyberspace and prevented services from Google and other U.S. companies from being adopted on the mainland. This protectionism gave Chinese startups room to thrive, but now the country's top leadership appears to be turning the regulatory hammer on homegrown tech conglomerates that have grown too large for comfort.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more