China’s internet giants from Tencent Holdings Ltd. to ByteDance Ltd. have shared details of their prized algorithms with Beijing for the first time, an unprecedented move aimed at curbing data abuse that may end up compromising closely guarded corporate secrets.
Friday’s internet watchdog released a list that described 30 algorithms firms such as Alibaba Group Holding Ltd., Meituan and Meituan use to collect user data and make personalized recommendations. While the public list stopped short of revealing the actual code, it wasn’t clear the extent to which internet firms may have revealed their underlying software to regulators in private.
Many online services rely on algorithms to determine which TikTok videos, WeChat post and Instagram photos are displayed. These algorithms have a significant impact on user engagement and drive growth. China adopted March regulations that required internet companies to reveal such tools. This was done to combat data abuse complaints and help regulators maintain a more tight grip on internet businesses.
The algorithms used by the tech industry are highly guarded, and they have often been the subject of controversy in politics around the globe. China is different from the US in that it has a disclosure requirement. Meta Platforms Inc. (USA) and Alphabet Inc. argue successfully that algorithms can be considered business secrets. Legislators and activists are trying to learn more about data management and curating.
“No one has ever had access to such details before,” said Zhai Wei, an executive director of the Competition Law Research Center at East China University of Political Science and Law in Shanghai. “Tech companies’ algorithms are the key business secrets that represent their competencies.”
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Zhai stated that while the Cyberspace Administration of China requires minimal information, Zhai indicated that it might request additional details in order to probe allegations of data violation. The publication of the list means the implementation process is going smoothly, said Ding Mengdan, a lawyer at Beijing Yingke law firm’s Hangzhou office.
China has been tightening regulations to rein in the once-unchecked expansion of the country’s tech giants. The Personal Information Protection Law was passed in China last year. It also introduced the Data Security Law, which outlines stricter regulations for the way companies manage user data.
This algorithm list is only available to the public for a brief description of their operation and product or use case. For example, ByteDance says its algorithm discerns a user’s likes and dislikes to recommend content on apps including short-video platform Douyin, TikTok’s Chinese cousin. Meituan claims that its algorithms are able to dispatch riders’ meals in the fastest way possible based upon their availability and route.
Companies must submit to the CAC non-public data, such as a self assessment on security, data collected, identity and sensitive information. The CAC — which issued the guidelines in tandem with the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Administration for Market Regulation — said it will keep updating the list.
“The information provided by the companies to the CAC are much more detailed than what was published for sure, and that involves some business secrets, which is not possible to be released to the public,” Zhai said.
—Zheping Huang provides assistance
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