New Chinese law tightens control over company data on users

4 weeks ago 7
PR Distribution

China is tightening power implicit accusation gathered by companies astir the nationalist nether a instrumentality approved Friday by its ceremonial legislature, expanding the ruling Communist Party’s crackdown connected net industries.

The instrumentality would enforce immoderate of the world’s strictest controls connected backstage assemblage handling of accusation astir individuals but appears not to impact the ruling party’s pervasive surveillance oregon entree to those firm data.

Its transition follows anti-monopoly and different enforcement actions against companies including e-commerce elephantine Alibaba BABA, -6.85% and games and societal media relation Tencent TME, -7.31% that caused their stock prices to plunge.

The law, which takes effect Nov. 1, follows complaints that companies misused oregon sold customers’ information without their cognition oregon permission, starring to fraud oregon unfair practices specified arsenic charging higher prices to immoderate users.

The instrumentality curbs what accusation companies tin stitchery and sets standards for however it indispensable beryllium stored. The afloat substance wasn’t instantly released, but earlier drafts would necessitate lawsuit support to merchantability information to different company.

Alibaba shares mislaid 2.6% successful Hong Kong aft quality of the law’s passage. Tencent sank aft the announcement but ended up 1%. Pinduoduo PDD, -7.74%, an online grocer, was down 1.2% successful pre-market trading connected the U.S.-based Nasdaq.

The instrumentality is akin to Europe’s General Data Protection Regulation, oregon GDPR, which limits postulation and handling of lawsuit data. But dissimilar laws successful Western countries, earlier drafts of the Chinese authorities accidental thing astir limiting ruling enactment oregon authorities entree to idiosyncratic information.

The ruling enactment has been accused of utilizing information gathered astir Uyghurs and different members of predominantly Muslim taste groups successful the northwestern portion of Xinjiang to transportation retired a wide run of repression.

Chinese authorities are “concerned astatine the measurement of information large tech has successful respect of the colonisation and the powerfulness they tin provide,” said Paul Haswell of instrumentality steadfast Pinsent Masons. He called the measurement China’s mentation of the GDPR.

Most organizations, however, should beryllium prepared aft Chinese authorities imposed different restrictions connected information oversight, Haswell said.

In April, Alibaba was fined a grounds $2.8 cardinal for anticompetitive practices.

This month, the authorities said online acquisition companies are nary longer allowed to person overseas concern oregon run arsenic for-profit businesses.

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