The Chinese Communist government is considering setting up a big data joint venture by several Internet giants to strengthen regulation of big data on Internet platforms, sources said on Wednesday.
Bloomberg reported on March 24 that the sources said the Chinese government is considering setting up a government-backed big data company by several of China’s largest e-commerce and payment platforms to oversee data collected by technology companies, but it is unclear what data would need to go into the joint venture; the plan is expected to be led by the Communist Party’s central bank (People’s Bank of China).
The sources said the online companies expected to participate in the plan will be the initial shareholders in the joint venture, but executive appointments to the planned big data joint venture will need to be approved by regulators.
Bloomberg reports that the plan, while not yet finalized, highlights the growing concern and importance that Communist Party regulators are placing on the way Internet platform companies collect and use data.
The plan is one of a series of programs being considered by the Chinese government to regulate the data collected by Internet companies. A large number of Internet platform companies have risen to prominence in the Chinese market over the past two decades. In addition to the overwhelming dominance of Alibaba Group and Tencent Holdings, they include Internet finance giant Ant Group, the leading platform in transportation, Drip, and the take-out giant Meituan, among others.
One of the main obstacles to the plan is data ownership, people familiar with the matter said. Technically speaking, data ownership should belong to individuals rather than companies or governments. Setting up such a joint venture may require some changes to relevant laws and regulations.
A meeting of the Communist Party’s Central Committee of Finance and Economics held earlier this month said that the data property rights system should be strengthened, the responsibility of platform companies for data security should be reinforced, and financial activities should all be brought under financial supervision.
Bloomberg reported that the plan, if implemented, would mark a significant increase in control of China’s online industry by Communist Party regulators; even if it is not implemented, Communist authorities still have an alternative plan available.
The Wall Street Journal reported on Jan. 6, citing people familiar with the matter, that Communist regulators plan to require Ant Group to share the vast amount of consumer credit data it collects. Facing pressure from the Chinese Communist Party, news broke in early March that Ant Group had handed over only a small portion of its consumer data to the Communist Party’s central bank.
The person mentioned above declined to be named because he was not authorized to comment to the public. The Communist Party’s central bank was not immediately available for comment.
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