context: Beijing has since late 2020 been domesticating China’s big tech companies, steering capital away from unruly expansion to national priorities. This new nine-ministry document is the highest level update on Beijing’s attitude to the platform economy since April 2019. The document surprised observers by clarifying cross-border data transfer rules, among other things. Separately, the communique issued by the Central Commission for Discipline Inspection’s plenum suggests that investigations of corruption are also moving in on the internet giants.

A new set of opinions, issued by nine ministries on 19 Jan 2021, highlights forthcoming laws and regulations related to tech giants, the gig economy, technological innovation and data and algorithm security. Titled ‘Several opinions on promoting orderly, healthy and sustainable development of the platform economy’, its issuing agencies include NDRC (National Development and Reform Commission), SAMR (State Administration for Market Regulation) and CAC (Cyberspace Administration of China) suggest their priorities in balancing development and regulation. The document outlines

  • high-level governance rules
    • high-level regulations implementing data security and privacy laws
    • competition, data handling, pricing and fintech rules designed for the internet or platform economy
    • clarifying the compliance systems for platform economy, including third-party assessment and information disclosure
      • cross-border data transfer: ‘grading+negative list’ (CP note: this clarifies cross-border data transfer rules for low-risk data)
      • algorithm grading scheme
      • designated responsibilities for ultra-large platforms (CP note: akin to the EU’s proposed Digital Markets Act)
    • inter-agency coordination in law enforcement
  • regulatory capacity
    • targeting the most problematic practices, e.g. anti-competitive behaviour, false advertising, unlicensed ride-hailing, tax evasion
    • finance, e.g. ring-fencing, anti-competitive behaviour, credit-rating, local investment
    • data and algorithms, e.g. data abuses, third-party assessment of algorithms, cybersecurity and data risk assessment
    • digitised regulations
  • market environment
    • a fair competition environment for platforms, on-platform operators and small businesses
    • discouraging ‘walled gardens’
    • labour rights protection, e.g. labour contract standards, transparency in gig economy algorithms, minimal wages, occupational injury and commercial insurance, social security

The Opinions also highlight platforms’ roles in fostering innovation

  • fostering breakthroughs in AI, operating systems, processors, etc.
  • expanding internationally, including through cross-border e-commerce
  • promoting the flow of data factors and other new business models
  • promoting digitisation of manufacturing, ag and consumption