China to rein in internet monopolies

China laid out detailed regulations for the first time to root out monopolistic practices in the internet industry, as Beijing seeks to curtail the growing dominance of corporations like Alibaba Group Holding and Tencent Holdings. Bloomberg reports.

The antitrust watchdog is seeking feedback on a raft of regulations that establish a framework for curtailing anti-competitive behavior such as colluding on sharing sensitive consumer data, alliances that squeeze out smaller rivals and subsidizing services at below cost to eliminate competitors.

They may also require companies that operate a so-called Variable Interest Entity – a vehicle through which virtually every major Chinese internet company attracts foreign investment and lists overseas – to apply for specific operating approval. And they also restrict the targeting specific customers through their online behavior, a common practice adopted by players both at home and abroad.

The latest proposal follows heightened scrutiny of technology companies worldwide, as regulators investigate the extent to which internet giants from Facebook Inc. to Alphabet Inc.’s Google can use valuable data to shore up their dominance. Consumers in China have in recent years protested against the gradual erosion of their privacy via technology from facial recognition to big data analysis.

Alibaba and Tencent were both down more than 3 percent in Hong Kong, in line with a broader tech selloff.