Chinese President Xi Jinping called on the country’s regulators to ramp up control on the internet economy in a speech on Monday, spelling more trouble for Chinese tech giants that have already been in the government’s crosshairs for their monopolistic behavior.
On Tuesday, Alibaba’s popular internet browser was removed from app stores in China after the state media criticized it for allegedly allowing misleading medical advertising. Alibaba — whose core business is online retail, much like its American counterpart, Amazon — has over the years amassed a large portfolio of print, broadcast, digital and social media platforms. The government is now reportedly ordering the company to divest and dump its media assets as authorities grow more concerned about the tech giant’s influence over public opinion.
In the United States, the Biden administration is recruiting high-profile leaders in the Big Tech antitrust space, but while Washington is responding to pressure to improve transparency and accountability in the industry, Beijing’s motive is to solidify political control to ensure that no private company will grow too large or deviate from serving the political and economic goals set by the ruling Chinese Communist Party.
On Friday, China’s regulators fined several other large tech companies in the country, including Tencent, Baidu, Didi and TikTok developer ByteDance, for past acquisitions and investments.
Last June, China’s internet regulator censured Chinese social media platform Weibo — of which Alibaba owns 30 percent — after it appeared to have censored posts about an Alibaba executive’s alleged extramarital affair.
But don’t mistake the party’s move as a defense of free speech. In November, Xu Lin, a top official in the party’s Central Propaganda Department, said in a public speech that China must “resolutely prohibit dilution of the party’s leadership in the name of convergence,” meaning media convergence, and “resolutely guard against risks of capital manipulating public opinion.”
The message is clear: Only the party can censor and manipulate public opinion.
Beijing maintains the world’s most sophisticated online censorship and surveillance apparatus. And private tech companies’ compliant participation in the system is essential to the efficient running of the apparatus. Companies censor and surveil users on the government’s behalf and hand over user data when so-called sensitive information is discovered.
Authorities also directly embed cybersecurity police units in major internet companies. Numerous users of WeChat, which is owned by Tencent, have gone to prison for criticizing the government. ByteDance, owner of the video-sharing app Douyin, worked closely with the police to disseminate state propaganda that whitewashed Beijing’s human rights violations in Xinjiang.
Chinese tech CEOs have little room to object or negotiate with regulators because there is no rule of law or redress. Few know the perils of straying from the party line better than Jack Ma, the founder of Alibaba and its affiliate financial firm Ant Group. In November, Chinese regulators abruptly suspended Ant’s IPO days before it was set to list, following Ma’s public speech in which he sharply criticized China’s financial regulatory system for stifling innovation.
After the speech, Ma disappeared from public view. It was not until late January that he resurfaced in an online video in which he spoke about his philanthropic activities supporting Xi's signature economic initiative to root out rural poverty.
In the age of government versus Big Tech, we already know which side will win out in China. Big Tech never even stood a chance.
On the surface, the party’s crackdown on tech companies is to protect the public from misinformation as well as the rights and interest of consumers. This is not entirely a facade; in recent years, laws and regulations have been promulgated to protect internet users against commercial privacy abuses and cybercrime. Last October, the government unveiled a draft of the Personal Information Protection Law, which, strikingly, has many provisions modeled after the European Union’s General Data Protection Regulation.
In response to pressure from the Chinese government, foreign governments, investors and users, some Chinese companies in the past several years have taken meaningful steps to protect consumer privacy and security, according to research by Ranking Digital Rights, a digital rights organization. Search engine company Baidu, as well as Tencent, have improved transparency in relation to how their users’ data is used, shared, stored and amplified.
These are positive developments for Chinese internet users, some of whom in the past have fallen prey to false and harmful online advertising and scammers due to tech companies’ irresponsible or predatory data-sharing practices. But the government’s clampdown on Big Tech will not solve the bigger problem for Chinese users: The abuse is by the unelected and unaccountable government itself.
Beijing’s efforts to stem the power of tech giants offers a cautionary tale: Antitrust measures are not a panacea to addressing the outsize power of Big Tech. Without a robust legal framework to protect freedom of expression and privacy, they will more likely further consolidate power in an abusive government.