algorithm Photo:VCG

China has issued regulations targeting algorithm recommendations, which will take effect on March 1, in a bid to promote the sustainable development of algorithm services and strengthen supervision to ensure long-term market order.

The regulations specify that service providers should not use algorithms to influence network public opinion to circumvent supervision and management, or act in a monopolistic way and engage in unfair competition, the Cyberspace Administration of China (CAC) said on Tuesday.

Moreover, algorithms should not be used to engage in illegal activities or the dissemination of illegal information, according to the CAC.

Analysts said that the regulations will promote the industry's sound development with a fairer competitive environment, while enhancing protection of users' legitimate rights.

The regulations will ensure small businesses in the internet industry have stable and long-term development as they do not have to worry about being threatened by industry giants, Liu Dingding, a Beijing-based independent analyst, told the Global Times on Tuesday, adding that the regulations will effectively crack down on monopolistic practices in the industry.

The regulations standardize the development of internet news and information services, requiring providers of internet news services obtain licenses in advance, while preventing the creation and distribution of fake information or the dissemination of news information issued by unqualified service providers. 

The regulations also enhance protection of users' rights, with platforms barred from making recommendations based on users' personal preferences and asked to provide convenient options for users to turn off algorithm recommendation services, while also improving protection and convenience for minors and senior citizens. 

Users will significantly benefit from the new regulations, especially when it comes to making bookings for tickets and hotels, said Liu.

China has recently stepped up the supervision of internet companies with some leading internet firms are being scrutinized for various illegal activities.

Chinese food delivery platform Meituan was fined 3.44 billion yuan ($533.5 million), or 3 percent of its 2020 domestic revenue, for monopolistic practices by the top market regulator in October last year.

The State Administration for Market Regulation (SAMR) released an administrative guidance, urging the platform to carry out "comprehensive rectification" in areas including the commission charge mechanism and algorithm rules, maintaining the legal rights of small and medium-sized vendors, as well as strengthening the protection of the legal interests of food delivery riders.

Market watchers said that in the sphere of regulating internet technology companies, China's concerns mirror those of most Western governments about market power and data usage, as well as the role of algorithms used by platforms to promote targeted sales. 

The platform economy remains very important to China, but following China's laws and government regulations is a prerequisite for these giants to continue enjoying the dividends provided by the vibrant Chinese economy, observers said.