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China joins global efforts to tame Big Tech

Suban Abdulla
·4-min read
An illustration picture taken in London on December 18, 2020 shows the logos of Google, Apple, Facebook, Amazon and Microsoft displayed on a mobile phone. - Accelerating the transition to an ever more digital life, the coronavirus pandemic has tightened tech giants' grip on billions of customers' lives. (Photo by JUSTIN TALLIS / AFP) (Photo by JUSTIN TALLIS/AFP via Getty Images)
The dominance of Big Tech firms such as Google, Facebook, Amazon and Apple has angered US, UK and EU politicians who have all suggested their own plans to tackle the industry. Photo: Justin Tallis / AFP via Getty Images

China is the latest country to wade into the fight against technology stalwarts, joining global efforts from the UK, Europe and the United States.

The country recently announced plans to impose competition obligations on Big Tech companies, such as Amazon (AMZN), Facebook (FB) and Chinese firm Alibaba (BABA).

It comes as Beijing unveiled a first draft of guidelines that will oversee competition in the industry.

Some of the proposals include blocking firms from crunching consumer data to set discriminatory prices, or selling products at prices below cost to gain market share.

China also heightened scrutiny of electronic-payment firms in January. It said that nonbank payment companies — that engage in competitive behaviour and dominate the market — could face antitrust investigations.

The dominance of Big Tech firms such as Google, Facebook, Amazon and Apple (AAPL) has angered US, UK and EU politicians who have all suggested their own plans to tackle the industry.

READ MORE: Big tech faces multibillion fines and break-up threats under new EU laws

In December, an EU bill was drawn up telling digital platforms to avoid engaging in anticompetitive behaviour, such as promoting their own products over those of competitors.

The European Commission (EC) proposed an “ambitious reform of the digital space” including laws that, if tech giants fail to comply, could see them face multibillion fines or even the threat of divesture.

The Digital Services Act and the Digital Markets Act aim to “better protect consumers and their fundamental rights online, and will lead to fairer and more open digital markets for everyone,” the EC said.

The Commission warned that non-compliance “could include fines of up to 10% of the gatekeeper's worldwide turnover, to ensure the effectiveness of the new rules.”

These gatekeepers were described as platforms that have a significant impact on the EU’s internal market, which serve as an important gateway for business users to reach their customers. It could include tech giants Facebook and Alphabet-owned Google (GOOGL), for whom 10% of turnover would mean billions of dollars.

READ MORE: EU will watch Biden's biggest battleground — Big Tech

Meanwhile Britain is planning to launch a competition watchdog aimed at preventing tech giants from abusing their market dominance.

The new Digital Markets Unit, which will be set up within the CMA will seek to enforce a new code of conduct governing the behaviour of online platforms. It will co-ordinate with regulators including Ofcom and the Information Commissioner's Office (ICO).

The new body could be given powers to suspend, block and reverse decisions made by technology companies and to impose fines for failing to follow the rules.

The UK’s Competition and Markets Authority (CMA) said that in 2019, Facebook and Google accounted for about 80% of the £14bn ($18.7bn) spent on advertising.

WATCH: What does a Joe Biden presidency in the US mean for the global economy?

It is a similar story across the pond. Formed US president Donald Trump’s aggressive stance on Huawei saw multiple countries, including the UK, oust the Chinese firm.

In July, the UK government decided to block Huawei from having a role in the country’s 5G network.

As a result, British telecoms companies were instructed to remove Huawei equipment from the 5G network by 2027 and stop buying new 5G equipment from the company by the end of 2020.

Under president Joe Biden, US tech companies expect a more relaxed relationship with the East, but the president has not been shy about his dislike for Silicon Valley.

A few months before the US Capitol was stormed by Trump supporters, Biden warned that social media firm Facebook’s “laissez-faire” attitude towards misinformation could “corrode” democracy. He has also vowed to revoke the digital giants’ shield against liability — the bedrock of the internet as we know it.

Anti-trust, the courts and Big Tech pose another battleground for Biden outside of digital services tax.

The Justice Department and Federal Trade Commission (FTC), which handle antitrust enforcement, have been investigating the tech companies including, Alphabet’s Google, Facebook, Amazon and Apple.

Alphabet, Google’s parent company is fighting an anti-trust lawsuit brought by the US Department of Justice. While the FTC sued Facebook amid ongoing investigations into Amazon and Apple.