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International relations

Baidu, Alibaba, Tencent execs to be grilled by Japan lawmakers

Data hoarding and ties to Beijing raise alarm

Chinese technology giants Baidu, Alibaba Group Holding and Tencent Holdings are called BAT.

TOKYO -- Japan's ruling party will invite executives from Chinese technology giants Baidu, Alibaba Group Holding and Tencent Holdings to hearings intended to examine their collection and use of personal information as Tokyo considers policies for protecting consumers and local businesses.

The three companies have fewer users here than American counterparts such as Google, Amazon.com and Facebook. But the continued growth of the Chinese internet titans raises concerns about the impact on markets and the risk of user data being concentrated in just a few hands.

Japanese Prime Minister Shinzo Abe and his Liberal Democratic Party aim to address such risks as they study big online platform providers via the party's Research Commission on Market Competitiveness.

These internet companies leverage massive customer networks to draw vast amounts of data, which in turn are used to expand into areas such as finance and retail. This expansion has spurred calls within Japan's government and the LDP to protect smaller domestic businesses that could be harmed in the process. Talk of tougher regulations and digital taxes has gained steam internationally as well.

The competitiveness commission held hearings in March with representatives from the Japanese operations of Google, Amazon, Facebook and Apple. The panel later called for legislation requiring greater transparency from platform providers in their dealings with vendors.

Chinese tech giants present an additional challenge because they are believed to have close ties to China's government and the ruling Communist Party. Alibaba founder Jack Ma, who stepped down as chairman of the e-commerce powerhouse in September, was revealed last year to be a Communist Party member.

Cooperation between Beijing and the Baidu-Alibaba-Tencent trio to vacuum up user data could give China an advantage in developing new businesses. Observers also express concern about these companies collecting and leveraging personal information without regard for basic user privacy rights or protections.

But some LDP members warn that regulating Chinese tech giants too heavily could harm domestic companies in the process. Baidu, for example, works with Toyota Motor and Honda Motor on autonomous-driving technology. The search giant also partners with Japanese companies on the Simeji Japanese-language input app and advertising to Chinese tourists in Japan.

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