Beijing hints that its Big Tech antitrust scrutiny could be permanent with new five-year blueprint

New five-year rule of law blueprint calls for stronger antitrust law enforcement
China’s antitrust law enforcement is understaffed at the moment, an official said an in interview this year

China technology

Xinmei Shen

Published: 6:00pm, 12 Aug 2021

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China has made antitrust enforcement a priority in its recently published five-year plan for the development of rule of law in the country, suggesting that Beijing’s regulatory attention to the anticompetitive behaviour of Big Tech could be the new normal.

China’s State Council and the Communist Party of China’s Central Committee have called for central and local governments to “improve and enhance anti-monopoly law enforcement” over the next five years, according to a new blueprint published on Wednesday that outlines the efforts government bodies should make from 2021 to 2025 to improve the rule of law in the country.

To “continuously improve” China’s business environment, there needs to be stronger and better enforcement of the country’s anti-monopoly and unfair competition laws, the guideline said.

It also called for more anti-monopoly legislation, along with other “important areas” including national security, technology innovation and biosecurity.

The new guideline also urged the government to continue research on legal frameworks related to the digital economy, fintech, artificial intelligence, big data and cloud computing.

China’s Big Tech antitrust challenges aren’t the same as those in the US

In addition, it encouraged the government to proceed with making government data available to the public while also protecting national security, business secrets and personal privacy.

Since late last year, the Chinese government has steadily increased its antitrust scrutiny on China’s Big Tech as part of its efforts to blunt the power and influence of major internet companies.

An investigation by the country’s top market regulator, the State Administration for Market Regulation (SAMR), in December of last year into e-commerce giant Alibaba Group Holding resulted in a record US$2.8 billion fine this April, a milestone that preceded more antitrust action against the internet industry.

Alibaba is the owner of the South China Morning Post.

Meituan delivery riders rest on their electric scooters while waiting for orders outside a restaurant in Beijing. Photo: AFP

That same month, the SAMR launched a probe into on-demand services giant Meituan over alleged anticompetitive practices.

While the official conclusion of the investigation has yet to be announced, it could result in a US$1 billion fine, according to a report from The Wall Street Journal.

In July, Tencent Holdings’ music arm, which operates China’s biggest music streaming platforms, was ordered by the SAMR to relinquish its exclusive licensing deals with global record labels, the very same ones that helped Tencent gain its music streaming dominance.

The S AMR also fined the company 500,000 yuan (US$77,143).

Now, the market regulator is flexing its regulatory muscles as it accelerates the expansion of its enforcement operations.

“Compared to mature economies such as the United States and the European jurisdictions, China’s anti-monopoly law enforcement authorities are still quite ‘young,’ and our law enforcement is far behind that of other countries in terms of staffing,” said Wu Zhenguo, director general of the SAMR, in a May interview with Antitrust Source, a publication run by the American Bar Association.

Central and local bureaus of the regulator are now running classes to train antitrust enforcement staff. One session on July 26, for instance, saw dozens of people taking part, according to an article published on WeChat by the central bureau of the SAMR.

This article appeared in the South China Morning Post print edition as: Blueprint keeps big tech in cross hairs

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