SOURCE / ECONOMY
Chinese tech firms asked to stop blocking others’ links in latest antitrust move: report
Long-expected move to tackle another monopolistic practice, help innovation: analysts
Published: Sep 12, 2021 10:58 PM
WeChat Tiktok Photo:VCG

WeChat Tiktok Photo:VCG



China's industry ministry has reportedly asked major tech firms, including Alibaba Group, Tencent Holdings and Huawei Technologies, to stop blocking normal access to one another's website links, in what could be the latest move to crack down on monopolistic behaviors and unfair competition in the country's internet sector.

The latest move by the Ministry of Industry and Information Technology (MIIT) was a further step by the authorities to stem monopolistic practices on Chinese internet platforms, analysts said.

Analysts added that this would be a substantive move in facilitating connectivity within the internet industry, conducive to maintaining users' legitimate rights and interests, while building an open and fair competition environment for the long-term sound development of the industry.

The MIIT recently held an administrative guidance meeting on the problem of internet firms' link-blocking activities, during which the ministry proposed standards for instant messaging services, telling them that all platforms must be unblocked by a certain time or face penalties under the law, domestic news portal Xinhua Finance reported on Saturday.

Companies, including Alibaba, Tencent, ByteDance, Baidu and Huawei, attended the meeting, the report said. These companies did not immediately comment on the news when reached by the Global Times.

The MIIT did not respond to an email seeking confirmation on Sunday.

But the new requirement falls within the expectations of analysts, who have criticized the lack of innovation and competitiveness due to severe monopolies formed over the years.

"After 20 years of rampant growth, a drastic reform of China's internet industry is urgently needed," Zhang Yi, CEO of iiMedia Research Institute, told the Global Times on Sunday. He said that the monopolistic positions of platforms like Baidu, Alibaba and Tencent have made it difficult for the industry to pursue innovation.

During the infancy of the internet boom, competition among domestic platform firms was comparatively fair as companies sought to attract users; however, as market concentration increased, a handful of top platforms started to make more profits by using such monopolistic tactics as blocking rivals' website links or selling search listings, said Liu Gang, chief economist with the Chinese Institute of New Generation Artificial Intelligence Development Strategies.

In February, ByteDance's short video platform Douyin filed a lawsuit against Tencent in Beijing, accusing the latter of blocking users from sharing content from Douyin on its social networking platforms WeChat and QQ. In response, Tencent said ByteDance's move was "maliciously framing it" and the firm would sue ByteDance for illegal infringement.

It is not difficult to solve the problem of link-blocking from the perspective of technology and supervision, Liu told the Global Times on Sunday, stressing that the key lies in whether internet companies are willing to yield their monopoly benefits.

Regulators in recent months have stepped up anti-trust supervision mechanisms in the internet sector for the formation of a fair, open, and better managed competitive market system.

On July 26, the MIIT said that it had launched a special six-month campaign to regulate the internet industry, including a crackdown on internet firms' malicious practices that disrupted market order, such as discriminatory link-blocking activities and interference in products and services operated by other entities.

Zhang said that allowing rivals' website links may reshuffle the competitive structure of the domestic internet industry. "It may bring short-term pain to internet giants as competitive barriers are removed, but it will stimulate their internal innovation in the long term," he said, noting that small and medium-sized internet firms are expected to grow into giants with inclusive market competition.

"Openness and cooperation are the main themes of our times. By blocking their rivals, the internet giants are ruining their own development prospects. The internet should never develop toward the direction of a local area network," Liu Dingding, a veteran industry analyst, told the Global Times on Sunday.

But, some analysts called for measures to address potential risks like the safety of links and coordinated monopoly practices among platforms after link-blocking is removed. 

Liu Dingding said that supervision should be improved, for example, reminding users of illegal website links on their own platforms.

"It's necessary to tighten regulation in the internet sector, as we have increasingly understood the positive and negative sides of the fast-growing industry. However, we should be cautious in imposing regulations on emerging sectors, such as the industrial internet, to avoid restricting their vitality," Liu Gang said.


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