Some of the big companies in China have lost more than $50 billion in terms of market value on August 17, 2021. This happened after a proposal from the government to cut down the anti-trust behavior among some of the big internet firms. The fresh efforts are being made by the State Administration for Market Regulation that began the antitrust campaign of the government against Big Tech.
As per the new rules that has been laid down by the government, the operators will not be allowed to announce fake information or statistics about product sales, orders and user reviews that could mislead the customers. Moreover, the companies would also be banned from making up the consumer reviews that would otherwise hurt the reputation of the rivals. Some of the other practices also include usage of data and algorithms that would redirect the web traffic from the rivals and create obstacles and would prevent the customers from installing the services and apps of the rivals.
The government has argued that the new rules are being applied to rule out any possibility of unfair competition. The regulator has also proposed a ban of the practice that would also be known as “choosing one from two”. Here the companies make agreements with the merchants that will prevent them from selling on the rival e-commerce platforms. Earlier in 2021, it was found that Alibaba was involved in a similar practice and had fined it with a $2.8 billion penalty.
After the implementation, the businesses that would continue to violate the rules will have to publicly apologize and commit to fix their problems. That would be apart from the punishment the regulators would decide on. After the news broke out, the Chinese tech stocks fell further in Hong Kong. However, these stocks have been crashing over the past nine months. Apart from Alibaba, other giants like Didi, Tencent and Meituan have also been fined for alleged anti-competitive behavior.
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