China’s New Antitrust Law Takes Effect August 1

Chinese tech companies will face stiffer penalties for crossing Beijing’s red lines on competition after lawmakers on Friday approved changes to the country’s antitrust law that were years in the making.

The amendments, adopted by the National People’s Congress Standing Committee, will go into effect on Aug. 1, Xinhua News Agency reports. The changes are the first to the law since it went into force in 2008.

The enacted version has yet to be published in full. But based on a draft proposal announced in October, the changes are designed to put China’s tech giants on a shorter leash despite signs in April that China’s leadership was open to easing its crackdown on the likes of top e-commerce player Alibaba Group Holding.

The draft amendments add the words “encouraging innovation” to the first article of the antimonopoly law’s general provisions. A new Article 10 that states “business operators shall not exclude or limit competition by abusing data, algorithms, technology, capital advantages as well as platform rules.” The wording seems to take aim at big tech companies that put the squeeze on smaller players and emerging rivals.

Under the amended legislation “the vast majority of anticompetitive practices by platform providers can be regulated by law,” Jiao Haitao, professor at China University of Political Science and Law in Beijing, told Chinese media.

In one likely scenario, tech giants are expected to face legal repercussions if they force vendors to operate on only one platform, a practice known in China as “choose one from two.”

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