Investors got jittery when China’s government started a coordinated action to limit the power of its tech industry. But business analyst Shaun Rein saw how powerful companies made consumers and the government weary. Rein believes stricter oversight of the technology industry will make it more sustainable, with fairer competition that will benefit consumers, he tells AP.
Until recently, tech firms operated in a regulatory gray zone, with relative freedom to create their business models, demand that 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.
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