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| 2 minute read

China Big Tech: can it have its (moon)cake and eat it?

As so many worker bees leave the business districts of mainland China’s cities today for a well-earned 8-day national holiday, many will be plugged into one or both of the country’s “super app” ecosystems operated by Alibaba and Tencent: plane and rail tickets to their home towns paid for by Alipay; taxis to the station funded through WeChat Pay; extra groceries ordered for home delivery through Ali’s Fresh Hippo app before the in-laws arrive for that big celebratory lunch; or just a few (more) idle hours to be killed on one of Tencent’s mobile games while one of those forms of transport whisks them to their holiday destination. The volume of transaction and other data that will be collected by China’s two tech giants during this year’s Mid-Autumn Festival and Golden Week bumper break will be almost immeasurable.

Almost! I am sure the boffins that Alibaba and Tencent recruit will find a way. And that is what continues to make that so successful. One of the factors that keeps them ahead of their also hugely resourceful peers in Big China tech is the vast amount of data that they have access to and know how to harness.

However, today I ask myself again, “Will it always be that way?”

The question was sparked this time by news coming out of Europe about the early draft of the Digital Services Act. Yes, I do know that the People’s Republic of China is not the replacement Member State for the brexiting UK, and China will not be directly implementing this forthcoming regulation into its legislative regime!

Yet, funnily enough, the original Chinese civil code noticeably borrowed from German civil law when the Asian superpower formulated its fundamental legal principles. So, as German’s Ursula von der Leyen is currently president of the European Commission, could history repeat itself? Similarly, speak to any of the competition lawyers in our Beijing office and they will quickly tell you that the drafting team for the Anti-Monopoly Law of China diligently studied and referenced the principles of EU competition law!

Although the EU’s proposals are extreme that Big Tech companies should make data collected on their platforms accessible to business users active in the same commercial activities, back in July China’s markets supervisor – the State Administration for Market Regulation – was already publicly scrutinising major internet platform operators over competition issues and being too “dominant”. The super app operators have already pledged to compete more fairly and the regulators are investigating still further (see our Summer’s Top Competition Stories 2020 for commentary).

Indeed, as we reported in our DigiLinks blog towards the start of Covid-19, one of the Chinese government’s successful strategies for containing the pandemic was to actively encouraged private companies to provide data for detailed analytics tracking the virus. Could the PRC regulators go one (admittedly large) step further and not only require sharing of private data lakes with government agencies for the sake of the public good, but urge or even mandate sharing of data between private organisations that may be in competition?

When everything is stacked up, maybe! Perhaps the FT’s comment in the article below that “Brussels is hoping to set global standards for the digital economy” is unknowing profound. China has precedent for looking to the European bloc for legislative insight on regulating interactions between individuals and organisations and particularly in the anti-trust sphere. Sharing of data among China’s tech players could be more likely than you might initially think and the modern-day concepts of the “sharing economy” and “digital economy” could soon become more intertwined in the Middle Kingdom than even now!

Something to ponder over a mooncake. Happy Mid-Autumn Festival to those that are celebrating!

The likes of Amazon and Google “shall not use data collected on the platform . . . for [their] own commercial activities . . . unless they [make it] accessible to business users active in the same commercial activities”, said the draft.

Tags

competition, data, chinatech, data and cyber, online safety