China to Amend Competition Law With Steep Fines

China’s two-year clampdown on Internet giants seems to have entered a new phase. On Tuesday, China’s market regulator voiced a plan to amend a law on unfair competition.

The change would target internet companies found guilty and slap them with fines as high as a 5 percent share of the firm’s annual revenue.

But what qualifies as unfair competition?

China’s regulator says internet giants are barred from using data, algorithms, technology, or capital advantages to create an unfair boost. That means algorithms can’t give users “unreasonably different treatment or unreasonable restrictions” by analyzing user preferences and habits.

Another new rule would block a business in a position of power from forcing a person or entity to sign exclusive agreements.

What’s more, the regulator says companies shouldn’t block external links or services from their platforms without reason.

Penalties for violators range from 1 to 5 percent of annual revenue. Legal representatives could also be subject to fines equivalent to a range of $14,000 to $140,000.

The changes are open for public comment until late next month.

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