China updates online advertising rules to tame algorithms that have been a powerful force behind success of apps like TikTok
- The amended Internet Advertising Management Measures will take effect on May 1 this year
- Algorithms are the secret sauce that drive the popularity of apps such as TikTok, connecting advertisers to target consumers more precisely
China’s market regulator has published updated rules on online advertising, including oversight of recommendation algorithms used by apps such as Douyin, the Chinese version of TikTok, that are used to push commercials to targeted individuals.
The amended Internet Advertising Management Measures, a big update from “provisional” regulation published in 2016, from the State Administration for Market Regulation, will take effect on May 1 this year, impacting a highly competitive, evolving market worth over US$70 billion.
While the updated regulations still focus on limiting pop-up online ads, they also lay the groundwork for the state to rein in powerful push algorithms. According to the update, anyone who uses recommendation algorithms in online advertising “must record the rules for algorithms as well as advertising logs”.
Algorithms are the secret sauce that drive the popularity of apps such as TikTok, connecting advertisers to target consumers more precisely.
However, potential abuse of algorithm power when it comes to children and teenagers is a concern for Chinese authorities and has been raised by US lawmakers to restrict the use of, or potentially ban, TikTok in the country.
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