Chinese regulators have ordered platforms that control transportation applications to correct “unfair market tactics” in a new step in Beijing’s scrutiny of internet companies, which has already brought down the market value of some of China’s biggest companies.
The Ministry of Transport, the internet regulator and other regulators ordered on Wednesday, the 1st, that 11 platforms stop using anti-competitive tactics by the end of the year, in addition to practices such as the recruitment of unlicensed drivers, according to statement released on Thursday.
The mobility industry, led by companies such as Didi Global and Meituan, employs millions of drivers who are part of the growing app economy (gig economy) Chinese. These platforms often fight each other for market share by offering discounts and incentives to passengers and drivers.
The Chinese government has already expressed concern about the exploitation of this type of work, given that drivers often work long hours and do not have guaranteed labor rights. The Chinese state trade union in July called for greater protection of labor rights, and encouraged workers in the gig economy to form unions.
Industry leader Didi has about 90% of the market in China, but the Chinese internet regulator is investigating allegations of privacy violations by the company. Therefore, rivals try to take the company’s customers.
The 11 companies targeted by this Wednesday’s alert were ordered to inspect their business practices, create a governance plan and correct problems by the end of the year, to “promote healthy and sustainable development” in the mobility sector.
In recent months, Chinese officials have tightened their grip on industries such as e-retail and online education, after years of rapidly growing tech companies amid fears they would exert a disproportionate influence on society.
Beijing has launched a series of antitrust, data security and other related measures from the end of 2020 in an attempt to tighten control of internet giants such as Alibaba and Tencent. Source: Associated Press.
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