China’s months-long regulatory campaign targeting the tech sector is taking aim at a common practice that leading industry players deploy to foil rivals — blocking external links, which regulators consider anti-competitive.
For years, large Chinese internet companies from e-commerce behemoth Alibaba Group to social media giant Tencent Holdings have used various means to block their users from sharing links to posts and products on other companies’ platforms. These techniques set up what are known as “walled gardens” to protect the creators’ own digital ecosystems, stymie rivals’ growth and prevent users from spending their cash elsewhere.
Now authorities vow to tear down the walls to promote connectivity among different internet platforms, a move to protect users’ rights and market competition. But it may shake the tech giants’ long-valued growth models.
At the same time, there is no unanimity among Chinese regulators on how the walls should be dismantled, as some are concerned that completely open connectivity will increase the difficulty of supervision, one industry source said. The Ministry of Industry and Information Technology (MIIT) wants healthy growth of the internet industry, while the cybersecurity regulator focuses on content security, and the public security department is concerned about online fraud, another person close to the matter said.
At a Sept. 9 meeting, the MIIT pressed executives from leading tech titans including Tencent, Alibaba, ByteDance and Baidu to dismantle link blockades. Companies were ordered to submit plans by Sept. 17. The ministry has been pursuing a campaign since July to crack down on online misconduct including pop-ups, data collection and link blocking.
“We will urge related companies to follow requirements and open up links to each other’s instant messaging platforms step by step,” Zhao Zhiguo, the general director of MIIT’s Information and Communication Management Bureau, said at a press conference shortly after the meeting. Blocking links “messes up users’ experience, harms their rights, and disrupts the market,” Zhao said.
How the three largest internet platform operators — Tencent, Alibaba and ByteDance — will open their system is the…