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Earlier this year, Alibaba’s internal advertising team was filled with questions from staff as Chinese anti-corruption officials began investigating the giant.
But the management of the company had no answers to many questions. China’s technology companies had not yet been able to comply with the country’s competition laws.
Staff said the directors interviewed them and downloaded reports chatting on the Alibaba communications platform. The authorities had the power to seize anything they wanted, even to the point of surprise which could stop the work. In the course of the investigation, supervisors told co-workers to study criminal cases in the EU and US in order to prepare.
A sudden explosion from the State Administration of Market Regulation (SAMR) has disrupted the technical sector.
Alibaba’s shares have dropped by about 18% since the December investigation, and they have not struggled much even though the authorities have completed their first trial. and $ 2.8bn fine. Meituan’s food company has dropped nearly 5% since it became the second largest research target in late April.
More than 30 technology companies have also been asked to prepare and provide information to SAMR, including leading company Didi Chuxing, uncertainty in front of him blockbuster US IPO.
“It’s a fast-paced U-turn that surprises everyone: in China, regulators can travel much faster. Instead, China is following US and EU rules – the guidelines are correct,” said Daisy Cai, head of the company’s Beijing headquarters in the capital. capital B Capital.
Public outrage is running a trial
Proponents of her case have been working to make the actual transcript of this statement available online. Proponents of her case have been working to make the actual transcript of this statement available online.
Beijing’s mission is also seen as re-encouraging multi-billionaires such as Jack Ma, founder of Alibaba whose Ant Group IPO was launched last year, and re-establishing companies to serve the people and the interests of the government.
“It does not matter whether it is a anti-bullying law or a non-competitive law, for this government [laws] and all monitoring tools. It’s all about setting standards, and what works best for you will be used, “said Wei Shilin, a lawyer at Dentons.
A Chinese passenger waiting for orders in Wuhan © Getty Images
Enacting competition laws was not the only thing to improve the market, admitted Guo Shan, a Plenum consultant in Beijing, as the authorities were closely monitoring fintech support and staff. “Antitrust could be a tool to help save these professionals,” he said.
In March, Li Shouzhen, a member of China’s executive committee, told state media that China was shifting away from “inclusive and prudent laws” in which its professional giants were allowed to grow indefinitely into “science and technology”. , with the goal of protecting consumers and startups from established giants.
Beijing also wants its technology companies to do initial research, to help them in the long run with the US, instead of just looking to attract as many consumers as possible on their platforms.
The rulers have nothing
But in many ways, antitrust regulators are more than just the size of the Chinese arms industry. As of March, SAMR had only about 50 members, according to Huang Yong, a member of the State Council’s antitrust committee.
It does not have a special financial team that can handle lawsuits, instead it works with secret agents or sometimes students, according to Fay Zhou, China’s main competitor at Linklaters. Meanwhile, technology companies have been busy recruiting lawyers, as well as government officials, to protect themselves.
Recent anti-poverty work could help SAMR grow, ”said Angela Zhang, a law professor at the University of Hong Kong and author Unparalleled Chinese Defense.
“Chinese government departments in all sectors are competing to adhere to the principles,” he said. “Oversight watchdogs see the recent campaign against Big Tech as an excellent opportunity to return, with its small office asking for more money and staff.”
The strongest barrier that SAMR has is the antitrust law, which allows for a maximum of 10% of the company’s annual earnings, the same penalty required by the EU’s Digital Markets Act.
But investigations under the law are delayed, and its main purpose is to prevent it, says Wei. SAMR is tackling a number of anti-modernization strategies, including forcing retailers to stay on the same platform, which was the main reason for Alibaba’s pay, lower prices after persuading customers and discounts, and offering different prices to different customers.
However many of these practices are difficult to explain and prove, and SAMR does not have the tools to track all companies that do this, lawyers said.
The technology industry has begun to sharpen the image of the public
Instead, regulators are looking at companies whose systems bring noise to the public. “Companies are able to handle complaints from consumers, customers, and the media,” Zhou said. “When a company’s behavior rises to the point of public dissatisfaction, the risk of litigation or even intervention becomes greater.”
Companies that attract the attention of regulators can expect a longer period of confidentiality and communication before anything happens.
In response to pressure, Chinese innovators have begun to challenge public opinion in fulfillment of their developmental promises. In April, Tencent said it would spend Rmb50 billion ($ 7.7 billion) on development and the environment. Pony Ma, founder of Tencent, also pledged $ 2bn of its shares to the charity.
Other high-tech officials are stepping down, including Colin Huang from Pinduoduo, who said he wanted to do scientific research, and Zhang Yiming from ByteDance, who spoke of “retaliation against the group”.
The big bang will be strict rules on knowledge
It is unknown at this time what he will do after leaving the post. After announcing the fine, Alibaba said its revenue is growing at 30% a year to Rmb930bn. Meituan’s chief executive has assured investors that the company should rely on its customers and has not changed its growth.
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Oliver Rui, a professor of economics at China-Europe International Business School in Shanghai, warned that drastic improvements in data collection could be a major threat to companies – just as Apple cracked down on global business by using tracking technology.
Advertisers remain confident in supporting current industry leaders. “These companies are leaders because they have created great competition. Their platforms still have the necessary central power, and they will continue to be leaders, “added Cai, a progressive capitalist.
Additional reports of Nian Liu
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