China requires 'self-correction' of monopolistic behaviour by 34 local web giants

Alibaba was just the beginning, says regulator, as it forbids western web titans' favourite bullying behaviours

China’s State Administration for Market Regulation has warned 34 local web “platforms” to make sure they comply with local laws, and take care not to adopt western startups' aggressive tactics, or they may suffer the same kind of smackdowns recently inflicted on Alibaba.

A notice from the Administration (SAMR) reveals that it on Tuesday teamed with China’s Central Cyberspace Administration and State Administration of Taxation to hold an “Internet platform enterprise administrative guidance meeting” at which 34 companies were reminded of China’s economic plans, the internet’s central position in making them a reality, and then “asked to give full play to the warning role of the Ali cases”.

The 34 were then given a month to ensure they comply with Chinese competition laws, then offer the public a commitment explaining how they will do so.

SAMR will follow up with inspections and any companies it finds still using anti-competitive practices “will all be severely punished in accordance with the law.”

Chinese journalist Zichen Wang, who writes an English-language blog that interprets Chinese policy, wrote that SAMR wants to stamp out the following activities:

• “Er xuan yi,” literally, “choose one out of two,” meaning punishing merchants from selling on rival platforms;
• Abuse dominant position in the market;
• Buying out leading but small entrants to a burgeoning market;
• Burning through cash to grab market share in community group buying;
• Discriminating against certain users based on big data;
• Disregarding counterfeiting on the platform;
• Information leaks;
• Tax-related violations.

The regulator’s notice points out that its actions don’t change China’s policy of allowing several large web companies to reach colossal scale and perhaps dominate their niches. But it also wants its indigenous web giants and online economy to offer “fair competition, innovative development, open sharing, safety and harmony, and to promote the realization of more dynamic platform enterprises, more convenient and high-quality online consumption, and a more prosperous and orderly platform economy.”

And make sure that all happens in a month!

The 34 companies called in for the chat were: IQiyi, Baidu, Shell Search, Didi, Dangdang, Duodian, JD, Kuaishou, Meituan, Daily Youxian, Qihoo 360, Qunar, Sogou, Weidian, 58.com, Sina Weibo , Bytedance, Bilibili, Dingdong Shopping, Are you hungry, Gome, Hema Xiansheng, Pinduoduo, Ctrip, Xiaohongshu, Reading, Suning.com, Ali, Beibei.com, Mogujie, Netease, Yunji, Vipshop, and Tencent. ®