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A closer look at China’s new algorithm regulations
Mar 1, 2022

A closer look at China’s new algorithm regulations

The rules apply to companies that use algorithms to do things like recommend videos or set prices.

On Tuesday, China’s government will start enforcing regulations on companies that use algorithms in their products or services to do things like control search results, recommend videos or set prices. 

It’s part of China’s broader efforts to crack down on its tech sector. Among other things, these new rules would prohibit companies from using someone’s personal information to show them a different price for a product than someone else.

As part of our Quality Assurance series, we’re taking a deeper look at these policies. Jennifer Conrad is covering this story for Wired.

Jennifer Conrad: What’s impressive about these regulations is the scope of them. They cover everything from ride-hail services and things like that, where a worker may be dispatched based on an algorithm, to the kind of content that you see when you go on a website to recommendation algorithms for, say, e-commerce, and also the different prices that people might see. There are going to be regulations in place that say that you can’t discriminate against someone based on their buying habits or the type of iPhone they use, which the companies will have to comply with.

Kimberly Adams: Can you give me an example of what this will feel like for Chinese consumers? What’s going to be different from the way it is now?

Conrad: First, they’ll be notified that algorithms are being used to target them by certain kinds of content or to show them what sort of things they may want to buy. And then they will be informed if they are being targeted with algorithms, and then they will have the option to either opt out or to have certain tags removed.

Jennifer Conrad
Jennifer Conrad (Courtesy Conrad)

Adams: How enforceable are these new rules in China?

Conrad: I think what we’ve seen over the past 18 months is that when the Chinese government decides to crack down on tech platforms, they can be very, very effective. For example, Didi Chuxing, which is a ride-hail service, had its app pulled from the app stores just after its U.S. [initial public share offering], and it caused its stock price to tank. This was allegedly because of data practices that they needed to clean up. On the other hand, you know, with an algorithm, with the constantly changing software that you have there, there may be some things that are a little bit difficult to get visibility into.

Adams: And with rules in place like this, how does China compare with other countries when it comes to regulating algorithms?

Conrad: So I think there’s a good comparison with the European Union in parts of Europe, where there is some overlap. You see, in particular, this idea of giving people informed consent or giving people the opportunity to opt out. Where there’s a difference — and Silvia de Conca, who is a legal scholar based in the Netherlands, put it to me this way: that in Europe and in the EU, there’s a focus on individual rights and human rights, whereas in China, they see these as collective issues. And so a lot of these rules, the way they’re written, it’s about maintaining a positive online environment, a healthy online environment, an online environment that promotes socialist values. And so that gets into some of the elements of content moderation that a Western country may not be so comfortable with.

Adams: I mean, we should probably note here, China’s government does have stronger control over its economy and markets, especially compared to other Western and more open market-oriented countries. Does that uniquely position China to be able to implement regulations like these?

Conrad: Yeah, I think that there are two things that you kind of see. One is that they can act with extreme speed when they want to. These rules were first proposed last fall in a draft form. And then the final version came out a couple of months ago, and now they’re set to go into effect March 1. If you look at the U.S., parts of Europe, you know, for years people have been debating when and how rules should go into effect. And one thing that you see a lot with China is these big companies will be unregulated for a very long time, but then when they put in rules, it tends to be very swift and very comprehensive. And so I think that’s what we’re seeing now, is sort of a correction to the lack of guardrails that were in place in the past and a very comprehensive effort to put new rules into place.

Related links: More insight from Kimberly Adams

You can check out the Wired piece Conrad co-wrote about China’s regulations here. And if you want to actually read the details of China’s new rules, Stanford University’s DigiChina Project has translated the entire regulatory policy and has the original Chinese-language text.

Here in the U.S., there are some efforts to regulate algorithms and artificial intelligence. The most recent attempt coming in the form of the Algorithmic Accountability Act of 2022, introduced last month. It would require companies to check their algorithms to see if the systems are vulnerable to bias and discrimination.

The European Union has its own regulation of algorithms and AI, and the legal website Lexology has a summary of the European Commission’s proposed rules. Lawmakers in Europe, however, haven’t made much progress getting these draft regulations passed.

Reuters reports that the commission is still split on issues related to facial recognition tech, say, to identify people in crowds and whether these rules should be enforced by each individual country or by the European Union overall. 

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The team

Daniel Shin Daniel Shin
Jesus Alvarado Assistant Producer