China issues draft guidelines for Internet recommendation algorithms

State media have since issued multiple calls for regulating the use of such algorithms. PHOTO: REUTERS

BEIJING (REUTERS, BLOOMBERG) - China has issued draft guidelines on regulating the algorithms used by Internet service providers to make recommendations to users, part of efforts to protect the privacy and data security of users, the Internet regulator said on Friday (Aug 27).

Service providers must abide by business ethics and principles of fairness and should not set up algorithm models that entice users to spend large amounts of money or spend money in a way that may disrupt public order, the Cyberspace Administration of China said in a statement.

Algorithms should not be used to create fake user accounts and users should be given the option to easily turn off algorithm recommendation services, it said, adding that the draft is open for public feedback until Sept 26.

The move comes amid a wide-ranging crackdown by Beijing on its Internet sector, which has seen authorities target and punish companies on issues ranging from monopolistic behaviour to consumer privacy.

Earlier this year, the Chinese Consumer Association criticised Internet companies for misusing personal data and "bullying" people into purchases and promotions.

State media have since issued multiple calls for regulating the use of such algorithms.

Internet companies globally use algorithms to predict user preferences and make recommendations. In China, this would include firms such as e-commerce giant Alibaba Group, ride-hailing firm Didi Global and TikTok owner ByteDance.

The proposed rules could impact firm like Alibaba, which uses its technology to recommend products to shoppers, as well as foreign companies like Apple, which steers users to certain products in its App Store.

China recently passed a data security law that will go into effect on Sept 1 to protect Internet users' rights in cyberspace and impose curbs on its fast-growing Internet industry.

Tech industry algorithms have been at the heart of political controversies around the world.

Facebook and Google have been accused of serving up news stories and videos that have exacerbated political polarisation and fueled violence. In US Congressional hearings in March, the companies were accused of using their platforms to hook kids on services like YouTube and Instagram.

While the US government has had limited success in forcing changes, Beijing's regulators have substantial power. The Chinese government has implemented a series of crackdowns this year against monopolistic practices and unfair competition in the technology industry.

The CAC is seeking public comment on the draft guidelines for 30 days and did not specify when it planned implementation. It is not clear how the agency will implement the proposals or which companies would be affected.

Here are some of the key proposed regulations:

  • Companies must disclose the basic principles of any algorithm recommendation service, explaining the purpose and mechanisms for recommendations in a "conspicuous" manner.
  • They must provide users convenient options for turning off algorithm recommendations and "immediately" implement any requests to opt out.
  • Algorithms should not be used for price discrimination based on users' preferences and habits.
  • Providers must regularly assess and test their algorithms and data to avoid models that will induce users' obsessive behaviours, excessive spending or other behaviors that violate public order and morality.
  • They must adhere to "mainstream values" and "actively spread positive energy, and promote the application of algorithms for the better". Algorithms cannot be used to set up fake accounts or falsely influence rankings and search results to benefit the provider, influence online discourse or avoid regulatory oversight.
  • Algorithms cannot endanger national security, disrupt economic and social order or infringe on the legitimate rights and interests of others.
  • Algorithm providers who can influence public opinion or mobilise the masses need to submit their services for the CAC's approval. Those without approval could be fined by up to 30,000 yuan (S$62,600) and ordered to terminate service.

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