China plans to investigate tech companies for potential algorithm abuse

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  • China’s internet regulator is cracking down on potential harm from tech companies’ algorithms.
  • It wants to send officials to personally inspect tech companies.
  • China has acted over the past two years to rein in its most powerful tech companies.

China has attacked what it describes as possible misuse of algorithms by its internet giants and plans to send government officials to conduct in-person inspections.

The Cyberspace Administration of China, the country’s state-controlled internet regulator, said in a statement Friday it would target “large-scale websites, platforms and products with high impact,” but did not name specific companies.

We first saw the news via Bloomberg.

The regulator wants China’s tech companies to submit their algorithms for review to prevent “abuse” and “bad information,” according to a Google translation of their statement. If officials decide that a company’s algorithms are somehow flawed or illegal, companies face unspecified penalties.

Most tech companies that provide content recommendations — whether it’s Google’s search engine, Facebook’s News Feed, or TikTok’s For You page — rely on algorithms to display results.

This latest announcement from the Chinese regulator aims to bring its biggest tech companies into line with their algorithmic governance rules introduced earlier this year. According to Stanford’s DigiChina project, these prohibit algorithmically generated fake news or the use of algorithms to cement a monopoly. They are also designed to curb online addiction, disrupt social unrest or affect China’s national security, Bloomberg reported.

Intervening in algorithms is China’s latest attempt to stem the growing power of its big tech companies, which include online retail giant JD.com, TikTok parent ByteDance and payments and commerce conglomerate Alibaba. Thanks to the tremendous popularity of their apps and websites, and China’s growing connectivity, these companies have turned their respective founders into billionaires.

But China is keen to maintain centralized control of its internet and is targeting how these companies collect data; where and how to list; and seemingly indirectly putting pressure on their ultra-rich founding CEOs. JD.com founder Richard Liu, ByteDance co-founder Zhang Yiming and Su Hua, founder of TikTok’s main competitor Kuaishou, have all stepped down from senior positions at their respective companies in the past two years.

The internet regulator said it had questioned officials from big firms like JD.com, Tencent, Alibaba and others about the recent sweeping job cuts, Bloomberg also reported.

China isn’t the only nation concerned about tech companies’ algorithms, a flashpoint for lawmakers concerned about everything from online child sexual abuse to free speech on social media.

The UK this month unveiled its Online Harms Bill, a wide-ranging proposed law aimed at how algorithms distribute illegal or harmful content. The proposed law mentions the word algorithm at least 11 times.

And U.S. lawmakers introduced a bipartisan bill, the Social Media NUDGE Act, in February to force companies to slow algorithmic sharing of misinformation.

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