China’s Anti-Monopoly Laws Represent Political and Commercial Efforts to Limit Big Tech, Expert Says

China has presented new anti-monopoly rules that aim to regulate some of the largest e-commerce and technology services in the country. According to a statement from China’s market regulator, the new laws will target internet platforms, while tightening existing restrictions that already limit Chinese tech giants.
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Beijing's decision follows similar moves from Australia, as the latter prepares to launch its own measures that would restrict Facebook and Google as a result of news content shared across their services.

Tom Harper, an assistant professor at Neijiang Normal University, looks at these laws in greater detail.

Sputnik: How will these new laws work and which companies will they target?

Tom Harper: Well, the earliest precedent that these laws follow are these financial legislations aimed at Ant Group late last year, so it will be mainly intended towards the big tech giants of China like Tencent, or JD, and while it's often been interpreted as a political move, which it undoubtedly is, it's also very much a commercial move particularly in regards to competitiveness. The precedent of Alibaba, it was able to out-compete Amazon and eBay for the Chinese market, but the big problem is, once a company has a near-monopoly, that raises a whole lot of other problems. An early precedent can be seen with Japan's post-war economic boom, where it was dominated by the Keiretsu, which are these world-leading Japanese companies, but whilst they were very successful, their success brought numerous problems. They effectively had a near-monopoly on the local economy, so there was no localised competition. Their large size also meant that they could not adapt to changes quite as quickly, and also in a similar precedent to the Ant Group, the Keiretsu owned the banks, so it meant they could access more funds a lot quicker but also this brought risks, which again, can be seen with the precedent of the Ant Group, which was described as a 'ticking financial time bomb'.

Sputnik: With a focus on e-commerce and internet services, how do these new rules compare to similar restrictions, such as Australia's new laws designed at limiting Google, Facebook, and other such companies?

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Tom Harper: Again, it comes back to the question of monopolisation. So, what the Australian rules seem to be attempting to do, is to try and break the monopoly that Google and Facebook have over information. Just like in China, we have sectors of the economy, particularly the technological economy, which is dominated by a small number of very big companies and again that raises questions about monopolisation. Also an issue which I feel has not been discussed with this, has been the nature of sovereignty. To return briefly to these recent decisions in China, it's very much about the role of the party and the party states. The core theme of Xi's tenure has been that the party is back in control and again, how this relates to the issue of sovereignty, is about the power of these companies, so for example, the big one has been the banning of Trump's Twitter [account], which has been seen as an example of big tech silencing people. So, the question is, if they can silence someone who is deemed to be one of the most powerful politicians in the Western world, it can silence anyone. So again, that's the question of what is really sovereign, and in the case of China, it's very much the party states, and that's what the rules serve to further underline.

Sputnik: Looking more broadly, will 2021 see further regulation applied to tech giants in China, and also around the world?

Tom Harper: There's definitely a lot more pressure to do so, particularly in regards to the rise of disinformation and fake news, because a lot of these platforms, whilst they've effectively been able to break the previous monopolies of more established media outlets and print media once had; the other side is that it provides opportunities for disinformation and of course, we've seen what the consequences of that with the attempted storming of the Capitol based on the QAnon conspiracy theory. So, I feel there is going to be a lot more pressure to regulate a lot of social media content, so it will be a lot more pressure on governments to regulate this, and it will be this question that will be one of the main issues for the next few years.

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