China Plans to Divide Internet Platforms into Three Grades of Increasing Responsibility Based on Scale

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China’s Internet authorities have unveiled plans to allocate the country’s online platforms into different categories with varying levels of responsibility based on their influence and size.

The State Administration for Market Regulation (SAMR) recently issued the draft versions of the “Internet Platform Categorisation and Grading Guidelines” (互联网平台分类分级指南(征求意见稿)) and the “Internet Platform Guidelines for the Implementation of Main Duties” (互联网平台落实主体责任指南(征求意见稿)) for the solicitation of opinions from the public.

The draft Guidelines divide China’s online platforms into six main categories and three main grades, while also stipulating that platforms must implement responsibilities with regard to fair competition, equal regulation and open ecosystems that vary depending upon size.

China has seen a rapid increase the number of its large-scale Internet platforms in recent years. As of the end of 2019 China was host to 193 Internet platforms whose value exceeded USD$1 billion, for an increase of 126 compared to 2015, according to the “Platform Economy and Competition Policy Observer (2020)” (平台经济与竞争政策观察(2020)) released by the China Academy of Information and Communications Technology.

The draft Guidelines propose dividing online platforms into the three grades of “super-grade,” “large-scale” and “small and medium,” with the threshold for “super-grade” set at annual active users of 500 million or more.

Wang Yong (王勇), deputy-head of the Social Sciences Economic Research Institute of Tsinghua University, said to state-owned media that use of the concept of a “super-grade platform” would help China’s efforts to enforce anti-trust measures and better regulate its Internet giants.

Under the draft Guideliens super-grade platforms will be subject to strict required across the nine areas of fair competition, equal regulation, open ecosystems, data management, internal governance, risk assessment, risk prevention, security auditing and promoting innovation.

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