China to Attack Unfair Competition With New Ministry-Level Task Force
China will set up a new joint task force backed by 17 central government ministries and departments to combat unfair competition as regulators tighten scrutiny of market dominance built up by tech giants such as Alibaba Group Holding and Tencent Holdings.
The State Council, China’s cabinet, approved the establishment of a new committee led by the State Administration for Market Regulation with participation of ministry-level agencies including the central bank, China Banking and Insurance Regulatory Commission, China Securities Regulatory Commission and the Ministry of Public Security, according to a statement released Thursday.
The new committee will coordinate supervision of unfair competition and lead policy-setting efforts to protect market order, according to the statement.
The establishment of the joint task force continued a series of recent regulatory moves targeting market domination led by tech giants, especially in the fintech sector.
On Nov. 10, China’s top market regulator issued draft rules aiming to prevent and curb anticompetitive practices on internet platforms. The proposed regulations, part of a series of measures the State Administration of Market Regulation plans to unveil to regulate online economic development, aim to stop internet platforms from abusing their dominant position to undermine market competition, the regulator said.
Two days later, Zhou Xiaochuan, a former governor of China’s central bank, warned in a public speech that internet and tech giants that hold a lot of data and dominate markets are prone to creating monopolies that restrain fair market competition.
China’s top banking regulator also doubled down on a push to rein in financial technology companies such as Ant Group Co. Ltd., promising to eliminate anticompetitive practices and strengthen risk controls in the industry. Liang Tao, vice chairman of banking and insurance commission, said the country will also strengthen anti-monopoly examinations of the fintech sector. The comments followed the suspension of Ant’s would-be record public initial public offering in Shanghai and Hong Kong.
China’s lawmakers are making major revisions to antitrust law for the first time in 12 years to give it more teeth while reining in the dominance of the country’s internet Goliaths. A draft revision of China’s Anti-Monopoly Law expands on criteria used to judge a company’s control of a market and mentions internet companies for the first time.
With the booming online economy, operators of large internet platforms in social networking, e-commerce, travel booking and food delivery have accumulated millions of merchants and hundreds of millions of consumers. Major players such as Alibaba, JD.com, Pinduoduo, Meituan and Tencent have been accused of unfair competitive practices such as colluding on sharing sensitive consumer data, creating alliances to squeeze out smaller rivals and subsidizing services at below cost to eliminate competitors.
Meanwhile, concerns are rising as fintech businesses like Ant have built dominant positions in payments and online consumer lending, largely free from the oversight applied to traditional financial companies.
Contact reporter Han Wei (email@example.com) and editor Bob Simison (firstname.lastname@example.org).
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