Hours after the Chinese government imposed a record $2.8 billion
fine on
Alibaba, a veteran internet entrepreneur urged regulators to do
something similar to his company’s biggest competitor.
اضافة اعلان
Douyin,
TikTok’s Chinese sister service, is suing Tencent, China’s
biggest internet company, to allow users to share videos to Tencent’s
ubiquitous WeChat messaging service.
Alibaba, meanwhile, has applied to set up its own apps within
WeChat, essentially daring Tencent to say no.
Lawsuits are flying and tempers are flaring on the Chinese
internet, home to the world’s largest single group of internet users. Beijing
made it abundantly clear late last year that it was serious about curbing the
power of a handful of companies that dominate online life in China. Now China’s
internet companies are kowtowing to Beijing and trying to make their rivals
look bad instead of correcting their own anti-competitive behavior.
If the Chinese government’s anti-monopoly campaign works, the
country’s consumers stand to benefit. But the battle royale between companies
could end up even further empowering the Chinese government, which already
keeps a tight grip over online content.
That could make the Communist Party, which controls the
government and the court system alike, the ultimate arbiter over the industry.
Competition wouldn’t decide winners. Beijing would.
American Big Tech has its own feuds, like the intensifying one
between Facebook and Apple. Sometimes those feuds involve the government, like
Microsoft and Google sparring in front of Congress. But none of those companies
are trying to make the US government the final arbiter of the future of their
industry.
The Chinese government has good reasons to rein in the power of
Big Tech. The companies built the digital infrastructure that has become
essential to ordinary Chinese lives, including shopping, banking, dining and
entertaining.
They didn’t get there just by innovating. They also built tall
walls and wide moats, making the Chinese internet possibly the most siloed
place in the digital world.
For years, Alibaba prevented merchants using its services, like
the online bazaar Taobao, from selling their goods on other shopping platforms.
Tencent’s WeChat app, which has 1 billion active accounts, doesn’t allow users
to share links for Taobao merchandise or Douyin short videos. Meituan, China’s
dominant meal delivery app, raised commission rates for restaurants that
refused to sign exclusive agreements. The first page of results from Baidu, the
search company, is often filled with links to pages controlled by … well, guess
who.
The same limits can be found among startups. Once startup
founders accept investment from Tencent, they usually have to agree that they
won’t seek investment from Alibaba. And vice versa.
The internet industry is fairly concentrated in the United
States, too, but not like it is in China. Imagine a world in which, if you’re
selling a product on Amazon, you can buy ads for it only on Amazon, not Google.
“Once the platforms amassed huge numbers of users and online
traffic, they could make their own rules,” a commentary in the official
Economic Daily said. “The online users fought in vain in the beginning.
Eventually they got used to it, just like a frog being slowly boiled alive.”
China’s internet companies have also become accustomed to
turning to the government. Their data and networks help the government surveil
the public. They follow the official censorship guidelines diligently and help
the state media blare propaganda. They have become an integral part of the
Communist Party’s social control machine. Tencent and Baidu declined to
comment, and Alibaba did not respond to a request for comment.
With the government waving the antitrust baton, they could become
even more servile.
Last week, Tencent announced a $7.7 billion fund dedicated to
what it called “sustainable social value innovations.” It would fund projects
involving education, carbon neutrality and the revitalization of rural
villages, many of which are pet topics of the party. Online, some commenters
praised Tencent for its adroit politicking. One Weibo commenter quipped that
Tencent was paying its antitrust fine in advance.
Alibaba used to be the most defiant in its dealings with the
regulators, which once looked the other way as the e-commerce giant bullied its
smaller competitors and vendors. As late as November 2019, an Alibaba executive
defended its exclusionary practices in a meeting with the antitrust regulator. “There
are always some competitors who speculate maliciously about the exclusive
cooperation business model,” she said.
In October, Jack Ma, the Alibaba co-founder, publicly accused
Chinese regulators of being too obsessed with containing financial risk. Days
later, the authorities called off the initial public offering of Ant Group,
Alibaba’s financial affiliate.
Alibaba’s attitude now couldn’t be more different. After the
regulator imposed the $2.8 billion antitrust fine, the company said it “accepts
the penalty with sincerity and will ensure our compliance with determination.”
Ma has kept a low profile since October.
Still, talk is cheap, and the platforms have done little to show
they are opening up. Tencent and Alibaba, for example, could start by allowing
each other’s payment apps on their services. That would benefit consumers and
show they are serious about following the law. That could also get the
government off their backs.
But so far, none of these companies have announced substantial
moves to correct anticompetitive practices. Instead, they are clashing and
maneuvering through the halls of power.
Yao Jingbo — founder and CEO of 58.com, a Craigslist type of
service associated with Tencent that hosts hiring and housing ads — this month
urged regulators to fine his biggest competitor the same way they fined
Alibaba. Critics pounced, saying that 58.com prospered by buying up or merging
with competition, and that it is no better than its rival.
Said one Weibo comment, “It’s dog biting dog.”
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