China's Key Data Sharing Mandate Wreak Double Whammy For Tech Industry Amidst Increased Antitrust Probe: Bloomberg

China’s instruction to technology giants regarding key data sharing acts as a double whammy for its tech companies recuperating from increased antitrust scrutiny, Bloomberg reports.

The U.S. reportedly delayed license approval to American companies for selling chipmaking equipment to China’s semiconductor giant Semiconductor Manufacturing International Corp (SMIC) (OTC: SMICY) (OTC: SIUIF) despite the semiconductor crisis.

China Communist Party prioritized data disclosure regarding search, e-commerce, and social media by the tech companies for the next five years to promote the healthy development of the sharing and online economies. Beijing was also launching a platform for sharing public and government data.

It is the first instance of China government’s prioritization of data disclosure by private-sector companies. However, Chinese Communist Party leader Xi Jinping previously acknowledged the importance of data.

Beijing initiated an extensive crackdown on alleged monopolistic practices by its giant internet industry last November over concerns regarding the growing influence of its largest private corporations from voluminous data collection.

Chinese tech titans ranging from Alibaba Group Holding Ltd (NYSE: BABA) and Tencent Holdings Ltd (OTC: TCEHY), along with emerging companies like ByteDance Ltd. and Meituan (OTC: MPNGF) (OTC: MPNGY), attracted government scrutiny for the collection of voluminous data via social-media apps like WeChat and Douyin. Conceding that data had the potential to topple their dominance and raise competition. 

Alibaba founder Jack Ma’s highly ambitious Ant IPO got deferred amidst regulatory hurdles. 

China’s antitrust regulators cracked down on practices, including forced exclusive arrangements with merchants known as “Pick One of Two” to algorithm-based prices favoring new users. Beijing also remained keen upon better regulation of the collection and use of consumer data.

The 14th Five Year Plan released on Friday did not disclose exact details on the company data sharing procedure.

Data ownership and security have long been a bone of contention between China and rival nations. Conditions further intensified upon President Trump’s bans on ByteDance and Tencent over alleged data collection of American users. Corporations were already mandated to provide access to their technology and assist with investigations involving crime and national security under a 2017 Cybersecurity Law.

Baidu Inc (NASDAQ: BIDU) welcomed China’s new initiative seeking a pilot program set up to break barriers among internet services essential to daily lives.

Price action: BABA shares are up 0.56% at $231.75, while BIDU shares are down 2.52% at $254.10 on the last check Friday.

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