China tech crackdown: Beijing to tighten regulation on internet platforms that profit from teenage users
- The regulatory tightening comes as shares of Chinese game and live-streaming companies are being hammered in Hong Kong amid broader market volatility
- Beijing has already banned profit-making in off-campus tutoring to reduce the burden on students, and has limited video game playing time for teenagers
China’s cyberspace watchdog has unveiled new draft rules that will make it harder for Big Tech firms like Tencent Holdings and ByteDance to profit from video gaming, live streaming and social media services targeted at the country’s 180 million internet users under the age of 18.
The new draft regulation, published by the Cyberspace Administration of China (CAC) on Monday, marks the latest effort by Beijing to shield minors from internet services. China has already banned profit-making in off-campus tutoring to reduce the burden on students, and has limited video game playing time to three hours per week for teenage players on Fridays, Saturdays and Sundays.
The draft, which is soliciting public feedback until April 13, goes a step further to cover all online services, including gaming, live-streaming, audio and video as well as social media. According to the draft, all online service providers must set up a “youth mode” for their services, stating clear limits in terms of user time, content and functions.
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Specifically, internet service providers are required to impose limits on the time minors can spend online, as well as put ceilings on all one-off purchases and accumulative daily spending, according to the draft.
The proposed changes come amid ongoing reports of underaged users overspending on internet services, ranging from charges billed to their gaming accounts to giving tips to live-streaming stars. A number of delegates at last week’s “two sessions” parliamentary meetings publicly lobbied the Chinese government to further restrict gaming time for minors.
The regulation aims to “strengthen the responsibility” of internet platforms when it comes to “the protection of minors online”, according to CAC, the watchdog that sets rules for online activities.
The latest regulatory tightening comes as shares of Chinese video game and live-streaming companies are being hammered in Hong Kong amid increasing volatility in the broader market.
Tencent, the country’s largest gaming company, lost 10 per cent on Monday while NetEase, another gaming giant, lost 8 per cent. Bilibili, a live-streaming platform, plunged 19 per cent, while short video-sharing app operator Kuaishou Technology was down 13 per cent.
If the new draft rules become regulation, the most likely scenario, internet platforms will have to take into account the physical and mental health of minors when designing, developing and operating their platforms. The companies will also need to provide a sufficient relief system for young victims of internet abuse, and publish a related social responsibility report each year, according to the draft.
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The new regulatory requirements will translate into higher compliance costs for Chinese tech firms, although major players like Tencent and ByteDance have already rolled out “youth mode” features.
The draft also targets hardware companies, including smartphone and computer makers, which will need to install minor protection software before they launch their products on the market, or at least provide clear and visible installation instructions for young users.
In addition, the regulation emphasised the responsibilities and obligations of platforms on establishing and improving anti-addiction systems for online content, restricting minors’ online spending, and protecting them from “unhealthy values”.
