What is China's technology crackdown?
The conflict between the two giant companies, TEncent, and the 360 protection system company.
In 2010, Tencent and the 360 protection system company entered, achieving great success during their inception until 2010. There was fierce competition between the two companies, so that things began to go wrong when the protection system company blocked advertisements in the Tencent QQ application, and in return Tencent responded to it by Creating an applicationA new QQ Doctor antivirus, which achieved great success, as this application obtained more than 100 million installs in a very short period after its announcement, to take over 40% of the Chinese market immediately, and in response to that step, the protection system company also sent a warning via the pop-up screen warning In which users that qioIt is a malicious and fraudulent program, and in addition to that, it has also prevented any user who has installed the 360 application on his device, forcing users to choose only one of them.
What are the consequences of China's tech crackdown?
Soon after this conflict got out of control and both companies started to sue each other to later take the case to the Supreme Court of China. But the most surprising thing is that the Supreme Court of China did not actually find any of these two companies guilty of monopolistic behaviour.
This is because China has taken a very permissive approach, making monopolistic anti-competitive behavior the foundation of the Chinese Internet.
What is repressive measures against tech companies?
This conflict between the two companies helped to show the flaws in the Chinese government.
Over the past decade, the Internet in China has become a free fight mode due to rampant anti-competitive behavior and the lack of intervention of Chinese governments to stop it. So, the world was surprised when, in 2020, the Chinese government took a major turn, deciding to take a series of sudden and violent repressive measures that were targeting major technology companies in China without exception, including imposing heavy fines, completely changing regulations, expelling managers and forcing them to resign, and many othersother procedures.These campaigns lasted for nearly two years, and this is what, in addition to the recent economic sanctions, caused Chinese technology companies to lose at least $1.5 trillion of their market value, which is equivalent to the market value of meta 4 times. After nearly two years of brutal repression, everything has recently come to an abrupt halt. A few weeks ago, the first-year acquisition of the ant group, the first victim of that aggressive campaign, was reported to be back on the right track again, and it wasn't long until state news pages suddenly started talking about government support for the sector as well. So given that the crackdown is about to end, it's time to look back at the last two slangs to understand what exactly happened.
Why did China crack down on its major tech companies and what has been the outcome?
The first signs of the campaign reverberated globally and appeared when Jack Matt gave a fiery speech at the BANSMET Summit 2020 in Shanghai, China, in which he slammed China's financial sector regulators for stifling innovation by demanding that tech companies like his Ant Group follow risk management strategies like that. He notes that such ideas are outdated, that tech companies like his should be careful with money, and that pesky government officials just need to get out of the way. Surely this whole audacity to criticize the Chinese government was generated by Jackma over the past years when he used to easily push regulatory agencies out of his way. But government officials have found that challenging the entire country's financial system in this way may be too much.
What speech led to Alibaba's $3 billion fine from the Chinese government?
This speech was given at the Bund Summit in Shanghai in October 2020.
Jakma disappeared in mysterious circumstances after that speech, and when he appeared, he quickly stepped down from all his roles in his companies, and the public offering of the Ant company was canceled, and this is at a time when his company, Alibaba, was fined about $ 3 billion, knowing that this is the largest individual fine of its kind in the history of China. . The decision to punish Jakma was quick and decisive, especially in light of the credit crisis in the Chinese real estate market. His rhetoric regarding easing financial regulations was a danger to the government at the time.
Certainly, the repressive campaigns in the Chinese government did not stop at Jakma only, as major companies that were active in the field of the Internet were targeted.
What are the laws taken as a result of the Chinese regulatory crackdown?
1- Anti-monopoly
2- misleading practices
3- Privacy used
(Punish companies that illegally collect user data).
4- Labor laws
Work culture in technical companies, which ranges from 9 am to 6 pm, 6 days a week.
The Chinese government no longer tolerates these violations and has decided to apply only labor laws that the government determines.
5- Algorithms
China has decided to implement new laws that will force companies to notify users when they use algorithms to recommend content related to their interests and allow them to opt out of those algorithms.
6- Finance and Governance
China decided to prevent technology companies from listing their shares in other countries.
7- Unstructured fields
China limits video game play for minors to only 3 hours per week.
Overall, those seven restrictions combined affected the country's economy, causing most companies' stocks to drop by at least two-thirds, resulting in a loss of $1.5 trillion in market value in the process and causing hundreds of thousands of layoffs.
In other words, the Chinese government has abruptly destroyed the tech giants it protected in the past.