Chinese regulators held a meeting on 13 April with representatives of 34 of the country’s largest technology companies, South China Morning Post reports. Tencent, Meituan, ByteDance, Alibaba, Pinduoduo, Kuaishou Technology and Didi Chuxing were among the companies that participated in the meeting in Beijing with the antitrust watchdog, cyberspace administration and the tax authority, according to a statement by the State Administration for Market Regulation (SAMR).
According to an official summary of the meeting published by SMAR, the meeting, hosted by the China Cyberspace Administration and the China Taxation Administration, aimed to ensure that major internet companies in China got the message from the USD 2.8 billion fine slapped on Alibaba, so that big technology companies comply with the rules of the industry.
Alibaba Group was recently fined a record CNY 18 billion (USD 2.75 billion) in China, after an anti-monopoly probe found the e-commerce giant had abused its dominant market position for several years, Reuters reports. The fine is equal to about 4 percent of Alibaba’s 2019 domestic revenues.
The watchdog urged the companies to “pay full heed to the warning of Alibaba’s case”, and conduct “self-inspections” in the coming month. They are also required to publicly disclose their commitment to conduct business in compliance with laws, according to SAMR.
SAMR also reports plans to carry out follow-up checks after the rectification period and those that failed to address misconduct would be “severely” punished.
These redlined behaviour includes forcing merchants to pick one platform, abusing dominant market position, making hostile bids to acquire top players in specific market segments, misusing big data to charge unfair pricing to certain clients, turning a blind eye to inferior quality products, leaking customer data, as well as evading tax payments. Forcing merchants to “pick one from two” is considered a misconduct that previously caused “huge harm” and must be “rooted out”, according to the statement.
The 34 internet service providers, many of which are listed in the US and Hong Kong, were told to “enhance their sense of responsibility and give priority to national interests”. “You must strictly avoid disorderly expansion of capital to ensure China’s economic and social security, and you must strictly avoid disorderly monopoly to ensure fair market competition,” according to the statement, referring to Beijing’s guidelines for the companies.
“Strengthening the governance of illegal behaviour of platform companies does not mean that the state’s attitude to support and encourage the platform economy has changed,” the regulators said, adding that the purpose of the move was to build a “new order” for fair competition and healthy development of the platform economy.
All platform companies must also investigate tax-related issues in accordance with tax laws, regulations, policies and systems, and actively carry out self-examination and self-correction, Chinese authorities said.
