The Wall Street Journal said the new rule would give China more control over the complex structures that Chinese technology companies use to get around restrictions on foreign investment. The Chinese government considers sectors such as the Internet, telecommunications and education sensitive due to national security concerns. In the context of the rivalry between China and the United States, Beijing fears that tech companies’ customer data may end up in the wrong hands.
Beijing has for some time been dealing with the dominant position of big tech companies with stricter regulations. On Friday, it was also announced that Chinese authorities want to apply rules to algorithms used by tech companies. These algorithms determine, among other things, which videos and other content are recommended to consumers. The new rules, among other things, ban practices that “encourage addiction or high consumption.”
Recently, the National People’s Congress of China passed a law to better protect people’s online privacy. The new China News Agency (Xinhua) reported that the rules will enter into force on the first of November. Recently, several companies such as Tencent, Alibaba and the taxi app Didi have been dealt with over competition violations and how they collect data from users.
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