Update published April 11, 2022
China’s Internet crackdown continues. On April 8, the country’s cyberspace regulator, the Cyberspace Administration of China (CAC), launched a formal campaign “Qinglang Comprehensive Algorithm Management Regulation in 2022” to investigate and correct vulnerabilities with algorithms of technology companies with the aim of protecting the rights of protect internet users. The campaign will run through December 2022.
The agency said in the latest statement that it will conduct on-site inspections of large-scale websites, platforms and products that have a strong influence on public opinion and social mobilization. It will prohibit providers of algorithmic recommendation services from generating and disseminating fake news and urge algorithms to adhere to “mainstream values” and “spread positive energy” to create clean and honest cyberspace.
Apparently, this time around are being targeted by internet giants, such as ByteDance and Tencent, whose business model has long relied on artificial intelligence-powered algorithms to help businesses promote ads and content. In January of this yearthe government announced the requirement for algorithm service providers to inform internet users about how they are being targeted and to give them the option to disable recommendation services.
Clearly, brands need to find new ways to target consumers. However, this is not a zero-sum game. Algorithms have long manipulated the information we receive, and netizens have become increasingly skeptical of the promoted content they receive. Perhaps a cleaner cyberspace can regain user trust and help brands build real connections with consumers.
Will any of these new practices migrate west when the investigation in China is over and a new set of rules is formulated and implemented?
Original article published on March 13, 2021
What happened: On January 5, China announced a major update to its internet protocol. The update, which will be implemented on March 1, 2022, will require algorithm service providers to give internet users more control over how companies target them, or the ability to disable recommendation services — making businesses less dependent on content moderation. The State Bureau of Internet Information, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Administration for Market Regulation all jointly have the Internet Information Service Algorithm Recommendation Management Rules reform.
The Jing Take: This new regulation aims to give netizens power over what online preferences they see online. This will affect companies that have pinned their business model and gained popularity through the workings of and over-reliance on preference prediction. Until now, companies and traders have been able to use seemingly omniscient algorithms to target specific demographics or individuals to sell products or influence opinion. Algorithms can anticipate your buying power so that sellers can adjust their selection accordingly. Companies such as Douyin (with 600 million monthly active users) and even Taobao (with more than 800 million monthly active users) rely heavily on services that predict consumer preferences in order to function.
This form of corporate surveillance has eclipsed the digital footprint for far too long, but all local online merchants, e-commerce businesses, short video apps, and social media platforms will be affected by the news. In addition, under the new rules, algorithms are no longer allowed to influence online public opinion, evade supervision and management or contribute to monopoly and unfair competition. Certainly not good news for companies whose turnover could be damaged in the short term. But if companies now have to renegotiate their relationship with their customer to something more creative, more personal, more authentic, is that really such a bad thing?
The Jing Take reports on a piece of breaking news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated discussions that erupt on Chinese social media.