China publishes draft competition rules for online platforms

China

China’s economy regulator has just printed draft rules aimed at preventing monopolistic behaviour by internet platforms, in a move that will boost scrutiny on the country’s e-commerce marketplaces and payment solutions.

China’s State Administration for Market Regulation (SAMR), that issued the draft, said it needed to prevent platforms from dominating the sector or by adopting methods aimed at blocking fair competition.

The definitions it supplied for online platforms imply the new rules can apply to e-commerce sites, such as Alibaba Group’s Taobao and Tmall marketplaces or even JD.com, in addition to payment services like Ant Group’s Alipay or Tencent Holding’s WeChat Pay.

The draft rules would also think about whether a trade treats different customers in different ways based on large data, payment capacity, consumption preferences, and use habits, according to the announcement from SAMR.

They come after China’s Financial Stability and Development Committee, a cabinet-level body led by Vice Premier Liu He, last month flagged the need to enhance mechanisms to guarantee fair competition and called for the strengthening of anti-monopoly law enforcement.

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The move also comes after the shock suspension last week of the planned $37 billion share market list of Ant Group, not long after authorities warned the company its profitable online lending company faced tighter government scrutiny.

The draft rules issued on Tuesday would look to stop e-commerce practices such as “choose one between two”, below that a marketplace limits brands from selling on multiple platforms.

Quite a few competitors and retailers have accused tech giant al of previously embracing such practices on its own platforms. This past year, SAMR called over 20 platforms into a meeting to request them to stop requiring merchants to sign exclusive alliance agreements.

SAMR is seeking reviews and opinions from the general public toward the draft rules before November the 30th.

The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Sophie Yu, Cheng Leng and Brenda Goh. Editing by Richard Pullin.

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