(Yicai Global) Nov. 1 -- Shares in Alibaba Group Holding and Tencent Holdings lost ground today after Chinese regulators issued draft guidelines that enter mega, or super-sized, internet-based firms into a category of their own that will be more tightly monitored and also requiring them to shoulder more responsibility to ensure fair play in the market.
Tencent’s stock price [HKG:0700] slid 1.91 percent to HKD471.80 (USD60) as of 2:24 p.m. China time while Alibaba [HKG:9988] was trading down 1.6 percent at HKD160.40.
Operators of super platforms, which are those that have more than 500 million active users and a market value of over CNY1 trillion (USD156.1 billion), must abide by the principles of fairness and non-discrimination, according to a draft set of guidelines released by the State Administration for Market Regulation on Oct. 29 for public comment. They must set up their own internal systems for data management and risk control.
Mega platforms refer to those large platforms that have a super strong capacity for restricting merchants’ access to consumers, according to the draft Guidelines for Implementing Responsibilities of Internet Platforms. Alibaba, Tencent and life services giant Meituan all meet these criteria. E-commerce platforms JD.com and Pinduoduo as well as gaming firm NetEase and smartphone giant Xiaomi come close.
The concept of “super platforms” has emerged due to the unclear definition of "platform dominance" in anti-monopoly law enforcement, Li Sanxi, chief expert with the Interdisciplinary Platform for Digital Economy, People’s University, told Yicai Global. The guidelines make mega platforms shoulder more regulatory responsibilities and serve as a reference for law enforcement, he added.
Editor: Kim Taylor