China to set up conference system to oversee unfair market practices after drafting guideline to shackle tech titans
China is forming a ministerial conference system to coordinate efforts to crack down on unfair market competition after tightening its oversight of tech titans like Alibaba Group Holding and Tencent Holdings earlier this month.
It will be led by the State Administration for Market Regulation, with representatives from 17 parties and ministries including the People's Bank of China, Cyberspace Administration of China and China Banking and Insurance Regulatory Commission (CBIRC), according to a State Council circular issued on Thursday.
The move will give focused guidance on countering unfair competition practices, propel the implementation of major policies and measures, address burning issues and improve public awareness of antitrust rules and policies, according to the circular.
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Officials from Public Security, Industry and Information Technology and Education ministries will also be represented on the system, it said.
Ant Group bears the brunt of latest scrutiny after regulators halted its record-breaking IPO on November 3. Photo: Edmond So alt=Ant Group bears the brunt of latest scrutiny after regulators halted its record-breaking IPO on November 3. Photo: Edmond So
The circular comes after the market regulator proposed new guidelines on its antitrust law this month to rein in internet-platform monopolies. The message wiped out more than US$250 billion of market value of Alibaba, food-delivery firm Meituan and WeChat operator Tencent within two days. Alibaba is the owner of this newspaper.
"Fintech has improved the efficiency of financial services, but it has not fundamentally changed the core nature of finance," CBIRC vice-chairman Liang Tao said at a forum in Beijing on November 11. "[We have to] include financial activities under the same comprehensive regulatory [ambit]."
China earlier sent a warning to its home-grown technology behemoths by scuttling Ant Group's record-breaking global stock offering, in an attempt to redefine fintech and rein in their growing dominance amid concerns that technology has usurped the fundamentals of finance, creating potential systemic risks in the world's second-largest economy.
Vice-Premier Liu He flagged the need to improve mechanisms to ensure fair market competition. Photo: AFP alt=Vice-Premier Liu He flagged the need to improve mechanisms to ensure fair market competition. Photo: AFP
Vice-Premier Liu He in October first flagged the need to improve mechanisms to ensure fair market competition and called for tougher anti-monopoly enforcement during a meeting on financial-market stability amid challenges from fintech and innovations.
The antitrust guideline, which goes for public consultation until end-November, could outlaw practices such as demanding vendors to transact only on one platform exclusively, or providing differentiated prices to customers based on their shopping history and profiles.
Before the clampdown, Chinese fintech companies had been given a wide room to roam and revolutionise consumer spending behaviour, enabling lenders in its so-called shadow banking system to grow into some of the world's most valuable companies.
In the US, the Justice Department has filed an antitrust lawsuit last month against Google for allegedly breaking the law in using its market power to fend off rivals, according to a Reuters report, a move comparable in significance to the lawsuit against Microsoft's software dominance in 1998 and AT&T phone company in 1974.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
