A new directive by China seems to be most problematic for Alibaba and Tencent as both have hatched vast online transfer, deposit-taking and insurance services, said the report.
China has issued fresh directives to crimp the expansion of the country's entertainment and tech giants, including Alibaba
, Tencent and Bytedance, owner of TikTok, a media report said.
Nine different departments, including China's National Development and Reform Commission (NDRC), the State Administration for Market Regulation and the Cyberspace Administration of China issued joint statements about how to regulate and tame the development of what it labels "the online platform sector", reported Chron, a US-based news outlet.
Among the new policy directives, the most prominent is the strict regulation of the tech companies' activities and investments in the finance sector.
According to an NDRC document, "Platform operators must not use data, technology, market, or capital advantages to restricting the independent operation of other platforms and applications."
This directive seems to be most problematic for Alibaba
and Tencent as both have hatched vast online transfer, deposit-taking and insurance services, said the US publication.
According to Chron, these divisions have helped transform e-commerce in the country and enabled other online services, such as music, video subscription. But after the government stepped in to cancel the IPO of Alibaba
Group in November 2020, the firms stand accused of overreach.
The announcement of the new directives came in the same week as the US increased its pushback against some of the same Chinese firms, underlining security concerns, and a Canadian researcher found the app for athletes at Beijing's Winter Olympics to be full of security flaws, reported Chron.