China passes new cybersecurity, algorithm rules

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China has passed two new rules regulating technology companies’ overseas activities and use of algorithms, marking the latest step by Beijing to rein in the country’s massive internet sector.

The country’s top internet watchdog, the Cyberspace Administration of China, said Tuesday that it and several other authorities passed a revised version of the Cybersecurity Review Measure that will subject digital-platform operators with more than one million users to a cybersecurity review if they plan to list overseas.

The administration also passed a rule regulating how tech companies use recommendation algorithms. The measure forbids “unreasonable discrimination” in pricing and other transaction terms based on user habit data, a key monetization mechanism for some of China’s largest e-commerce and short-video platforms.

When the two rules were submitted for consultation in mid-2021, the move triggered a selloff in China’s tech shares, adding another weight to a sector already struggling under multiple antitrust probes.

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