Advertisement
Regulation
TechPolicy

China’s internet addiction regulation could erode the user base of Big Tech platforms, analysts say

  • The new regulation that takes effect next year is not expected to have much short-term impact, but user habits may shift over time
  • The rules are the latest in Beijing’s years-long battle against perceived internet addiction among minors, including tough regulations on video games

Reading Time:3 minutes
Why you can trust SCMP
0
China has for years sought to combat what the government perceives as internet addiction among minors, leading to a slew of regulations from different government bodies. Photo: Shutterstock
Ben Jiangin Beijing

China’s latest regulation to further tighten internet use by minors, which takes effect on January 1, is expected to have a limited impact on Big Tech firms in the short term but could erode their long-term user base, according to analysts.

Chinese legislators passed a comprehensive regulation to curb the use of mobile devices and services among people under the age of 18, with the aim of creating “a cyberspace conducive to the physical and mental health of minors and protect [their] legitimate rights and interests”, according to the final draft issued by the State Council and published on the government’s website on Tuesday.

The ordinance, known as the Regulation on the Internet Protection of Minors, is the most comprehensive rule of its kind so far in the country that has ramped up internet restrictions on minors in recent years, particularly in relation to online video gaming. The regulation includes sixty articles placing varying responsibilities on the shoulders of Chinese smart device makers and mobile service providers, local governments and educational institutions, and parents.

According to the regulation, mobile device makers – which includes local smartphone giants like Xiaomi, Huawei, and Oppo – must pre-install minor-protection software, or clearly instruct users on how to install it. Gaming and short video service operators – including Tencent Holdings, TikTok owner ByteDance and NetEase – must also provide a “minor mode” on their platforms.

As of 2021, China had more than 191 million internet users younger than 18, according to the China Internet Network Information Centre. With tighter curbs on internet use under way, analysts said the impact on local Big Tech firms will be limited in the short term, but could hurt user numbers over time.

“For most internet and gaming firms, minors are not their target customers,” said Zhang Shule, an analyst at CBJ Think Tank. “Years of regulation against (internet) addiction has made minors a very small portion of free or paid users for top Chinese gaming companies.”

Zhang said he does not expect the roll-out of the regulation to hit revenues of Chinese internet firms.

Advertisement