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People use their smartphones along a street in the southern Chinese city of Shenzhen. Photo: AFP

Beijing launches fresh crackdown on internet industry misconduct as Hong Kong tech stocks sink

  • The six-month campaign will address the ‘tough problems’ of China’s internet sector, according to the Ministry of Industry and Information Technology 
  • Data security and infringement of user rights are among problems the ministry has pledged to address
China’s industry ministry has launched a new nationwide campaign to purge what it deems as problems in the internet sector, which has been battered for months in an almost continuous crackdown by different government regulators.

The Ministry of Industry and Information Technology (MIIT), one of China’s top government bodies responsible for regulating the tech industry, has begun a six-month campaign to address the “tough problems” of the internet industry, including disturbing market order, infringing users’ rights, threatening data security and unauthorised internet connections, the ministry said in a notice published in its website on Monday.

The campaign will target 22 specific scenarios, including apps that do not allow users to opt-out of personalisation, use pop-ups to mislead or deceive consumers, do not encrypt sensitive information when transmitting data and provide data to third parties without user consent, the ministry said.

It will also crack down on blocking and restricting normal access to other websites without a legitimate reason.

The strict measures against these irregularities, common in China, could have far-reaching impact on the business models and profits of the country's internet firms.

China’s Big Tech face new reality under Beijing’s data oversight

WeChat, the multipurpose super app run by Shenzhen-based Tencent Holdings, is known for blocking links to its competitors. ByteDance, owner of hit short-video sharing app TikTok and its Chinese version Douyin, has publicly attacked and even tried to sue Tencent over the practice.
WeChat has claimed in the past that it blocks direct sharing for safety and user experience reasons. ByteDance, for its part, also blocks links to WeChat as well as the live streaming channels of Alibaba Group Holding’s Taobao Marketplace and JD.com on its live-streaming channels.

Alibaba is the owner of the South China Morning Post.

MIIT’s statement was issued on the same day that tech stocks plunged in Hong Kong. Tencent fell 6.5 per cent while Alibaba dropped 4.7 per cent. Meituan, China’s on-demand local services giant, saw its share price fall by 7.7 per cent, while short video app operator Kuaishou Technology lost 9.3 per cent.

The ministry also said that it has already notified its local branches across the country as well as technology companies, who have been told to conduct “self-examinations”.

This is the latest round of regulatory scrutiny against China’s once-freewheeling tech sector, as different government bodies impose their authority over various internet-based services. The MIIT is in charge of managing areas including market access, market order, network resources and online information security. The government body regularly removes mobile apps from app stores when apps are discovered to have problems.
This article appeared in the South China Morning Post print edition as: Internet industry faces new crackdown
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