China passes new Cybersecurity, Algorithm rules

China on Tuesday announced new rules for its tech sector in a move set to further tighten Beijing's grip over its sprawling technology sector. The Cyberspace Administration of China (CAC) said it would put in force new rules that will boost oversight over how its platform companies make plans to list abroad or use recommendation algorithms. The Cyberspace Administration of China (CAC) said it would implement new rules from February 15 that require platform companies with data for more than 1 million users to undergo a security review before listing their shares overseas. 

The administration also passed a rule regulating how tech companies use recommendation algorithms. The measure forbids "unreasonable discrimination" in pricing and other transaction terms based on user habit data, a key monetization mechanism for some of China's largest e-commerce and short-video platforms. When the two rules were submitted for consultation in mid-2021, the move triggered a selloff in China's tech shares, adding another weight to a sector already struggling under multiple antitrust probes.