Chinese regulators will exercise greater control over the algorithms used by Chinese technology firms to personalize and recommend content in the latest regulatory move in the Internet sector.
BEIJING – Chinese regulators will gain more control over the algorithms used by Chinese technology firms to personalize and recommend content, the latest regulation on the Internet.
China’s Internet watchdog, China’s Cyberspace Administration, on Friday released a draft “Algorithm Recommendation Management Regulations” aimed at how technology companies use algorithms when providing services to consumers.
The move has widened the crackdown on China’s Internet sector, as regulators seek to strengthen data privacy and consumer rights and reduce anti-competitive practices to curb outside influence of technology companies.
Under the draft regulations, companies must disclose the basic principles, purpose and method of operation of its algorithm recommended services, and include easy options for customers to discontinue the recommended service. Should
Algorithms should also not be used in ways that could lead users to addictive behaviors, or incite them to spend excessively. It was not immediately clear how it would be implemented.
Companies that use the algorithm in ways that could affect public opinion must submit their algorithm for approval, or their service may be terminated and 30,000 yuan ( 4,630).
The draft algorithm management rules could affect companies such as Byte Dance, which owns the short video platform Dwayne and TikTak, as well as e-commerce firm Alibaba.
Bytendance uses a recommendation algorithm for users to forward videos, while Alibaba’s algorithm generates product recommendations for each user based on their browsing and purchase history on its e-commerce platform Taobao.
China’s largest technology firms, such as Alibaba and Tencent, have made tremendous progress in the past decade as millions of Chinese Internet users have rapidly adopted smartphones.
These companies offer everything from payments, games, entertainment and e-commerce. Algorithms and data collected from consumers became valuable assets as companies could mine data for key trends or suggest more personalized content to consumers.
However, the lack of regulation in this area has led to excessive collection of consumer data, online fraud and an increase in unfair consumer practices in technology. In some cases, algorithms were also used at discounted prices for consumers.