When China’s authorities cracked down on Jack Ma’s Alibaba, it was only the start of ongoing efforts to control tech companies and manage their data streams, says Shanghai-based business analyst Shaun Rein to WRAL. “Now Chinese people are quite concerned about data privacy because Alibaba and Tencent have so much data – even more data than the government,” he adds.
WRAL:
China’s Communist Party leaders are uneasy with the growing influence of big technology firms. Key issues are monopolistic practices and handling of user data.
Until recently, tech firms operated in a regulatory gray zone, with relative freedom to create their business models, demand merchants and vendors sign exclusive contracts with their platforms and collect user data to better understand their customers.
After China introduced health monitoring and quarantine apps during the pandemic, it became clear that tech companies like e-commerce giant Alibaba and gaming company Tencent controlled huge amounts of data, said Shaun Rein, founder and managing director of China Market Research Group in Shanghai.
“I think it was in the last year and a half that you can start to see just how much power these technology companies have,” said Rein.
Alibaba Group Holding recently was fined a record $2.8 billion over antitrust violations. Other big tech companies have been fined or investigated for alleged anti-competitive behavior and lapses in financial disclosure.
“Two years ago Chinese consumers didn’t care, they thought the convenience of apps outweighed any negative benefits,” Rein said. “But now Chinese people are quite concerned about data privacy, because Alibaba and Tencent have so much data – even more data than the government.”
Rein believes stricter oversight of the technology industry will make it more sustainable, with fairer competition that will benefit consumers.
Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.
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