Chinese technology stocks fell after Beijing tightened competition rules

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Shares in Chinese internet groups fell after the country’s regulator said it would tighten antitrust and platform restrictions on platforms, marking the latest phase of the sector’s crackdown in Beijing.

The state administration for market regulation, the Chinese antitrust supervisor, announced on Tuesday a draft rule banning unfair competition among Internet companies, which could sharply strengthen the government’s supervision over the country’s leading technology platforms when they are adopted this year.

Shares of Chinese internet groups ie – trade Alibaba, Tencent and JD.com fell 2 percent, 3 percent and 4.6 percent, respectively, in trading in Hong Kong after the announcement.

China’s market regulator has escalated demands for “self-correction“From dozens of internet companies, including Didi Chuxing’s driving platform, which became a special target of regulatory oversight after it was added to the U.S. list in June. In April, SAMR handed Alibaba a record A $ 2.8 billion fine due to the abuse of its market dominance. He had a showdown shaved billions market values ​​of the dollar from the Chinese technology sector.

Angela Zhang, an expert on Chinese antitrust law at the University of Hong Kong, said the measures would focus on practices including false advertising, fraudulent internet reviews, unfair competition, interoperability issues, data protection and consumer privacy issues.

Draft rules, which can be revised after a consultation period, barred groups from access widespread practices such as exploiting user data to learn how users behave and influence them not to choose competitors ’products or services.

Restricting traffic to other platforms by practices such as blocking hyperlinks to competitors or using fraudulent transactions or reviews to harm competition, also be prohibited.

The rules released on Tuesday allowed SAMR to “take swift action to address the various regulatory issues arising from the platform’s economy,” Zhang University in Hong Kong added.

The Chinese Communist Party has placed antitrust regulation at the center of a broad campaign limit the behavior of Internet groups that it considers to be detrimental to social stability and national security.

Analysts say the campaign was partly triggered by user anger over perceived exploitation powerful internet companies.

Chinese lawmakers plan to revise the country antitrust law this year.

The vast amount of user data held by Internet companies came to the forefront of regulatory action last month after the Chinese Cyberspace Administration, the Cyber ​​Security Supervisor, released investigation in Didi a few days after she found herself on the New York charts.