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China’s tech regulation and its latest target 

Chinese authorities decided to work on plans restricting the usage of algorithms by companies to sell products to customers. Analysts say that this move goes against business interests and establishes a model for other countries.

China’s largest tech companies, such as Alibaba or TikTok-owner ByteDance, decided to build their businesses on algorithms serving content that they are sure a client will spend money and time on.

Last Friday, a cybersecurity regulator released rules for regulating the use of recommendation algorithms. This proposal is open for commentary until the end of September without any specific implementation date so far.

The new rules might set up a conflict between China’s technology giants and Beijing, seeking to get their power.

Analysts said that other countries and technology companies worldwide would closely watch China’s algorithm rules for how they might affect business standards and innovation.

What the draft says

Here are a couple of points in the draft rules:

  • Companies have to stop setting up algorithms that drive clients to become addicted or spend vast amounts of money.
  • Service providers have to inform users about their provided algorithmic recommendation services.
  • Users must have the ability to turn off algorithmic recommendation services. Users could also choose, change, or delete user tags that the recommendation algorithm uses. 
  • Using algorithms to sell goods or provide services to consumers, the company must not use the algorithm for unreasonable purposes in terms of costs or trading conditions.
  • Any breaches of the rules could end up fining companies around 5,000 yuan to 30,000 yuan. This is equal to $773 and $4,637.

What implementation might look like

The idea of Recommendation algorithms is that they are code carrying specific information about users to help contribute more tailored results. 

Regulators should inspect the code that every company makes behind the algorithms.

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