Regulations on Internet Companies in China Follow Suit With Global Crackdown on Big Tech

By Thomas Price Wednesday, November 25, 2020

As 2020 continues to be an extremely tumultuous year across nearly every spectrum of life, concerns over Big Tech around the world are becoming a larger point of concern for many governments. Especially in China and the United States, there has been a larger effort by each government to reign in and slow down certain aspects of growth and influence that many of the largest tech companies currently possess. While clearly the scope and power of each country’s respective federal government is wildly different, each has taken steps toward stronger regulations aimed at tech companies though perhaps in very different ways. Considering both the current situation with Google and Facebook as well as the sudden halt on Ant Group’s IPO, here is how the United States and China have equipped themselves to take on Big Tech.

China’s Tightened Regulations

Given the significant power that the Chinese federal government has, the answer to maintaining a hold on the growing influence of tech companies simply involved announcing tighter regulations on the industry. The initial fears of these regulations incoming caused major losses across the largest Chinese tech and internet-based companies. In fact, between Alibaba, Tencent,, and Meituan, a combined $255 billion was lost when looking at the values of each company’s Hong Kong stock shares. This was followed very shortly after by the Chinese government abruptly blocking Ant Group’s IPO, which was set to be one of, if not the largest in history.

The purpose of these tightened rules according to China's top market regulator, the State Administration for Market Regulations, was to prevent internet monopolies. While many saw the blocking of Ant Group’s IPO as a retaliatory decision caused by Jack Ma’s critical remarks toward regulating the current market, seeing them as too risk-averse and stifling innovation, other tech giants have come out in support of them.

Despite being a co-founder of Alibaba, the current CEO of the company, Daniel Zhang, came out in praise of the tightened restrictions seeing them as both “timely” and “necessary.” As a result of Zhang’s speech, Alibaba’s stock shares rose by about 5%. While China’s approach toward the regulation of big tech companies has been rather straightforward, the United States government has had to take a more roundabout approach.

The United States’s Approach to Big Tech

Without the executive power over regulation in the manner that China has, the United States has in turn been working toward reigning in tech companies through different antitrust lawsuits levied at tech giants like Google and Facebook.

For Google, the antitrust lawsuit from the federal government has been joined by 11 other state attorneys general with a new lawsuit from New York, Colorado, Iowa, Nebraska, North Carolina, Tennessee, and Utah set to file separately and then combine with the current case next month. The lawsuit is centered around Google hurting competitors by favoring their own products over listing their rivals. This is a large step from the Department of Justice, who had spent months, if not years, preparing to file this suit.

While not quite as far along, Facebook is also in some hot water in regard to antitrust laws. In fact, the Federal Trade Commission, along with 12 bipartisan state attorneys general, has reached the final stages of filing possibly multiple antitrust complaints against Facebook by early December. If taken to federal court, which is recommended, up to 41 different states would most likely join the lawsuit or multiple lawsuits against Facebook. The complaint will be focused on Facebook’s violation of antitrust laws in order to maintain its enormous market share in the social media industry. More specifically, the major three points of contention fall on the company’s acquisition of Instagram, the weakening of privacy protections after acquiring WhatsApp, and the refusal to share user data with rivals in order to stifle competition. These claims are bolstered by a comprehensive report from the House of Representatives Judiciary Committee.

Final Conclusions

As Big Tech becomes a larger concern for many different global leaders, government actions are being taken in order to alleviate some of these worries. While the Chinese federal government and that of the United States remain very different, each has been working toward fairly similar goals in theory: to keep monopolies from forming in the tech industry. However, the differences in approach and perhaps even intention continues to be a major separating factor.

About the Author

Headshot for author Thomas Price

Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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