Stocks in Asia-Pacific rallied during Monday trade as investors noted China's major tech companies faced a jolt after the issuance of a new anti-monopoly policy over the weekend that is seen as potentially fostering more online competition.
The new set of anti-monopoly rules has on its crosshairs internet service companies as the government puts more teeth on current restrictions faced by the country's leading tech groups, many of which dominate online sectors and squeeze out new players.
The guidelines, issued by the State Administration for Market Regulation (SAMR), restricts companies from a host of actions, including forcing merchants to select between China's leading internet companies, a long-time practice in the market.
The Anti-Monopoly Committee of the State Council will oversee the rules, urging business operators in the internet industry to report any monopolistic or unfair trade activities according to law. The AMC also said that authorities will forgo or reduce fines if the operators comply with certain directives.
Around Monday afternoon, shares of Chinese tech companies listed in Hong Kong were mostly higher: Tencent was up 0.82%, JD.com rose 1.15% while Meituan advanced 1.55%. Alibaba fell 0.16%, Business Insider reported.
The new measure came during the yearly central meeting for China's prosecution, judicial and public security work, held Saturday and Sunday in Beijing. It also came after China launched an inquiry into claims of monopolistic practices at Alibaba Group Holding last month. China's regulators threatened to throttle Alibaba's businesses over such activities.
The guidelines are expected to put new pressure on China's major internet platforms, including e-commerce sites like Alibaba Group's Taobao and Tmall marketplaces or JD.com. The anti-monopoly rules will also cover payment services such as Tencent's WeChat Pay and Ant Group's Alipay.
Monopolistic practices have become widespread in the online platform economy, the Global Times reported, citing the SAMR. These activities include offering different types of prices for the same product or service to numerous consumers and reducing or even excluding transactions in certain products or services.
The new guideline is expected to prevent companies from price fixing, restricting technologies and using algorithms and data to manipulate the market.