China proposes strict control of algorithms

China is not done with curbing the influence local internet services have assumed in the world's largest populous market. Following a widening series of regulatory crackdowns in recent months, the nation on Friday issued draft guidelines on regulating the algorithms firms run to make recommendations to users.

In a 30-point draft guidelines published on Friday, the Cyberspace Administration of China (CAC) proposed forbidding companies from deploying algorithms that encourage addiction or high consumption" and endanger national security or disrupt the public order.

The services must abide by business ethics and principles of fairness and their algorithms must not be used to create fake user accounts or create other false impressions, said the guidelines from the internet watchdog, which reports to a central leadership group chaired by President Xi Jinping. The watchdog said it will be taking public feedback on the new guidelines for a month (until September 26).

The guidelines also propose that users should be provided with the ability to easily turn off algorithm recommendations. Algorithm providers who have the power to influence public opinion or mobilize the citizens need to get an approval from the CAC.

Friday's proposal comes at a time when Beijing is increasingly targeting companies for the way they have handled consumer data and the monopolistic positions they have assumed in the nation.

Earlier this year, Beijing-backed China Consumers Association said local internet companies had been bullying" users into purchases and promotions and undermining their privacy rights.

Beijing's recent data-security crackdown and tightening regulations around tutor services have spooked investors and wiped hundreds of billions of dollars.

Friday's guidelines appear to target ByteDance, Alibaba Group, Tencent, and Didi and other companies whose services are built on top of proprietary algorithms. Shares of Alibaba and Tencent fell slightly on the news.

In recent years, several governments including those in the U.S. and India have attempted - to little to no success - to get better clarity on how these big tech companies' algorithms work and put checks in place to prevent misuse.

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