China releases draft rules preventing unfair competition in internet sector

China’s top market regulator on Tuesday moved to regulate the country’s internet sector, drafting rules preventing unfair competition.

The rules aim to protect the legitimate rights and interests of operators and consumers and “promote the standard, sustained and healthy development of the digital economy,” said the State Administration for Market Regulation (SAMR) in an online statement.

“Business operators are not allowed to use data, algorithms and other technical measures to influence users’ choices or other ways to carry out hijacking of traffic,” the SAMR said, adding that they are also not allowed to illegally capture or use other operators’ data.

The draft is open to public feedback until September 15.

Beijing has been firming its grip on internet platforms in recent months, citing the risk of abusing market power to stifle competition, misuse of consumers’ information and violation of consumer rights, in a reversal after years of a more laissez-faire approach.

The country issued hefty fines to companies including e-commerce giant Alibaba Group (9988.HK) and social media company Tencent Holdings (0700.HK) as part of a widening crackdown and has vowed to draft new laws around technology innovation and monopolies

New York-listed shares of Alibaba , JD.com Inc and Baidu Inc fell between 2.9% and 3.5% in premarket trading. Tencent-backed online brokerage Futu Holdings (FUTU.O)slid 7% and was among the most actively traded stocks across U.S. exchanges, while peer UP Fintech Holding slipped 3%.

Tencent Music Entertainment Group (TME.N)shed 3.8% and was set to extend losses for a sixth straight session despite reporting better-than-expected earnings.

“The proposed regulations’ specificity evidences a clear set of priorities in setting the ‘rules of engagement’ for online competition,” said Michael Norris, research and strategy manager at Shanghai-based consultancy Agency