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Homeinside e commerceThe latest target of China's tech regulation blitz: algorithms

The latest target of China’s tech regulation blitz: algorithms

  • China's increasingly powerful cybersecurity regulator last Friday released sweeping draft rules for regulating use of so-called recommendation algorithms.
  • That's the technology that has helped China's largest tech companies from e-commerce giant Alibaba to TikTok-owner ByteDance build up their multibillion dollar businesses.
  • The world is watching. The proposed rules, if passed, might require companies to restructure their businesses and give regulators access to proprietary information, Kendra Schaefer, Beijing-based partner at Trivium China consultancy, told CNBC.

Computer code is seen on a screen above a Chinese flag in this July 12, 2017 illustration photo.Thomas White | Reuters

BEIJING — Chinese authorities are planning to restrict how companies use algorithms to sell products to consumers, a move analysts said likely runs counter to business interests and sets a precedent for other countries.

China's largest tech companies from e-commerce giant Alibaba to TikTok-owner ByteDance have built their multibillion dollar businesses on algorithms that serve up content a customer is more likely to spend money or time on, based on previous viewing records.

The increasingly powerful cybersecurity regulator last Friday released sweeping draft rules for regulating use of these so-called recommendation algorithms. The proposal is open for comment until Sept. 26, with no specified implementation date so far.

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