China launched new regulatory measures to its technology giants on Monday, requiring them to end their long-standing practice of blocking links to each other on their respective websites, otherwise they will face consequences.

The comments made by the Ministry of Industry and Information Technology (MIIT) at a press conference marked the latest step in Beijing’s extensive regulatory crackdown, has put various industries from technology to education and real estate in trouble and evaporated the market value of some industries. Billions of dollars. One of the largest companies in the country.

China’s Internet is dominated by a few technology giants, have historically blocked links and services from competitors on their platforms.

Zhao Zhiguo, a spokesperson for the Ministry of Industry and Information Technology, stated that the restriction of normal access to Internet links without justifiable reasons “affects user experience, harms user rights and disrupts market order”, adding that the Ministry of Industry and Information Technology has received reports and complaints from users since it initiated the industry review. Practice in July.

“At present, we are guiding relevant companies to conduct self-examination and rectification,” he said. The instant messaging platform is one of the first areas they are targeting.

He did not specify the consequences for companies that do not comply with the new standards.

The Ministry of Industry and Information Technology did not name any companies, but 21st Century Business reported on Saturday that Alibaba and Tencent were among the companies that were told last week to end this practice at an unspecified time.

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The shares of Alibaba Group and Tencent Holdings fell by more than 6% and 3% respectively on Monday, while the Hang Seng Technology Index fell by 3%.

The practices targeted by the Ministry of Industry and Information Technology are common.

Tencent restricts users from sharing content from ByteDance’s short video app Douyin on Tencent’s instant messaging apps WeChat and QQ. In February, Douyin filed a lawsuit with the Beijing court, claiming that it constituted a monopoly. Tencent claims that these allegations are baseless.

In other cases, Alibaba’s Taobao and Tmall e-commerce markets do not allow the use of Tencent’s payment service WeChat Pay as a payment option.

Tencent expressed support for the guidance of the Ministry of Industry and Information Technology and will make necessary adjustments in stages.

An Alibaba spokesperson mentioned to Reuters CEO Zhang Yong’s remarks on August 3, when he said that rectification was “very necessary”.

“The forced cracks in China’s walled have the potential to rewrite China’s digital advertising and e-commerce landscape,” said Michael Norris, research and strategy manager at AgencyChina, a consulting firm in Shanghai.

“In the short term, all eyes will be on Tencent, because it will discuss what it means to open WeChat to Alibaba and ByteDance.”

The Ministry of Industry and Information Technology also said on Monday that China has “too many” electric vehicle (EV) manufacturers and the government will encourage integration.

© Thomson Reuters 2021