China Regulators Cracking Down on Peer-to-Peer Sharing Economy
China’s State Administration of Market Regulation (SAMR) said on Monday (Aug. 30) that it plans to beef up its supervision of the country’s peer-to-peer (P2P) sharing economy, in which consumers share goods and services through an online platform.
Some financial experts say the sharing economy will grow by 10 percent per year for the next five years. Bikes and mobile phone chargers are among the most popular shared products in China, where a lack of regulations on bike-sharing has led to an oversupply of bikes and more than 40 companies squaring off.
SAMR will regulate phone charger platforms and consider imposing fines on food delivery company Meituan for its acquisition of the bike-sharing startup Mobike. Didi Global also offers social ride-sharing and bike-sharing to more than 550 million Chinese users, and has its own autonomous driving division.
China also on Monday announced tighter regulations that will limit how long minors can play video games.
Related: China’s New Digital Double Standard Would Hobble Big Tech While Helping Itself To Data
New data and consumer privacy laws will take effect in China in November, making it tougher for Big Tech firms to compete in the country. The Personal Information Protection Law (PIPL), as it is officially known, differs from other regulations that govern data collection and transmission, such as the European General Data Protection Regulation (GDPR).
China will reportedly still have a significant reach into consumers’ private information under PIPL, which follows legislation from June and April that would make much of the data collected from social media, eCommerce and other online activities open to the government.
Those moves would apply to companies including Alibaba, ByteDance and others — which means at least some of those firms may curtail their data collection activities in the face of continued crackdowns from watchdogs.
Meanwhile, Tesla is boosting its data center operations in the country to keep the data that it collects in the country inside China. For Apple, where China represented 18 percent of total net sales in the second quarter of fiscal 2021, the increased scrutiny on data might mean the algorithms and app stores that are so critical to giving people what they want might be watered down or hobbled.