Chinese regulators to exercise greater control over tech firms’ algorithms
27 August 2021, 11:54
The move is the latest in a regulation spree across the country’s internet sector.
Chinese regulators are to exercise greater control over the algorithms used by the country’s technology firms to personalise and recommend content.
The move is the latest in a regulation spree across China’s internet sector.
The country’s internet watchdog, the Cyberspace Administration of China, has released a draft proposal of “algorithm recommendation management regulations” aimed at managing how technology companies use algorithms when providing services to consumers.
The move expands the crackdown on the internet sector in China, as regulators seek to strengthen data privacy and consumer rights and curtail anti-competitive practices to curb the outsized influence of technology companies.
Under the draft regulations, companies must disclose the basic principles, purpose and operation mechanism of its algorithm recommendation services, and must include convenient options for users to turn these off.
Algorithms should also not be used in ways that may cause addictive behaviours in users, or induce them to spend excessively. It is not clear how this would be enforced.
Companies who use algorithms in ways that could influence public opinion must also submit them for approval, or risk having their service terminated and a fine of up to £3,378.
The draft algorithm management regulations could affect companies like ByteDance, which owns short video platforms Douyin and TikTok, as well as e-commerce firm Alibaba.
Bytedance uses recommendation algorithms to push videos to users, while Alibaba’s algorithms tailor product recommendations to each user on its e-commerce platform Taobao based on their browsing and purchasing history.
China’s largest technology firms, such as Alibaba and Tencent, have experienced breakneck growth in the last decade as hundreds of millions of the country’s internet users have rapidly adopted smartphones.
These companies offer everything from payments, games, entertainment and e-commerce. Algorithms and data collected from users became valuable assets as companies could mine data for trends or recommend more personalised content.
But a lack of regulation in this sector also saw an uptick in excessive collection of user data, online fraud and unfair consumer practices across the technology sector. In some cases, algorithms were also used in differential pricing for consumers.
