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China Targets Apps In Tech Crackdown

Chinese authorities increasingly are limiting the ways technology companies in the country are allowed to operate, The Wall Street Journal (WSJ) reported.

Noting that the crackdown on alleged anti-competitive behavior by Chinese tech luminary Jack Ma appears to have been just an early example of a new approach to regulating, WSJ reported: “Not a week seems to go by without Chinese regulators calling out tech companies for alleged offenses, ranging from inconsistent pricing to imperiling user privacy to difficult working conditions.”

In May, China’s regulator of cyberspace accused operators of 105 apps of illegally gathering and exploiting user data, according to WSJ. Companies were given three weeks to change their ways or face legal consequences. And just before that, operators of 117 apps were ordered to make changes.

Ma’s Ant Group is something of a cautionary tale, WSJ reported. Over a span of less than six months, Ant went from planning a huge initial public offering (IPO) to restructuring itself.

Angela Zhang, an associate professor of law at the University of Hong Kong told WSJ that China’s approach “is to nudge firms to comply with the regulatory demand without formal intervention.”

Social media companies continue to be under intense scrutiny, with popular eCommerce and social media app Xiaohongshu shut down after it posted a message on China’s Twitter-equivalent Weibo marking the anniversary of the 1989 Tiananmen Square massacre, according to WSJ.

China’s history is of light application of antitrust policies for a large, industrialized economy, but the government seems to be changing course, WSJ reported.

“The government would like to send a very clear message to all of these tech conglomerates that it’s the government who is in charge,” Mark Natkin, managing director of Beijing-based industry research firm Marbridge Consulting, told WSJ. “Any notion otherwise ultimately won’t be tolerated.”

In February, China’s State Administration for Market Regulation published new regulations governing big technology companies.

In April, Chinese authorities were imposing new regulations on companies that finance big tech in the country.

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