The new rules impose tougher penalties for violations and prohibit large tech companies from using their market advantage to coerce smaller vendors into exclusive business contracts. The changes represent the first amendment to the Anti-Monopoly Law since it was enacted in 2008.

Chinese authorities began cracking down on Big Tech last year, and the sector accounted for the vast majority of financial penalties in 2021 stemming from antitrust violations. The revisions now in force mean that the law has caught up to Beijing’s actual enforcement.

Early on after China first introduced its anti-monopoly law, foreign multinationals notably ran afoul of competition rules. Authorities in 2009 rejected a bid by Coca-Cola to buy a major Chinese beverage company. In 2015, US chipmaker Qualcomm was hit with a 6 billion yuan fine – US$975 million at the time – alleging abuse of its market position.

The rise of domestic Chinese tech platforms next drew the attention of regulators. In 2019, Beijing instructed the anti-monopoly body, the State Administration for Market Regulation, to clamp down on tech giants. Amendments to the antitrust law began to be proposed around this time.

In November 2020, authorities began policing the practice of “choose one from two”, in which tech giants tell vendors not to do business with rival platforms. In April last year, Chinese e-commerce leader Alibaba Group Holding was handed a record fine of 18.2 billion yuan. Top food delivery app Meituan was fined 3.4 billion yuan in October.

Alibaba said it would abide by the guidance from regulators. Meituan also said it would cease engaging in “choose one from two”.

Fines collected from anti-monopoly violations, including confiscated income, totalled 23.5 billion yuan last year, up roughly fiftyfold from 2020. Tech companies accounted for 21.7 billion yuan, or 92% of the penalties, according to local media.

Beijing has yet to conduct a similar crackdown on state-owned enterprises with dominant market positions. President Xi Jinping has called state enterprises “key pillars” of the national economy.

In regions controlled by China’s three biggest state-owned oil companies, gasoline prices remain elevated. Ticket prices for high-speed rail service between Beijing and Shanghai have climbed continuously.

“For a long time, the monopoly and oligopoly problem at state-owned enterprises has remained unaddressed, and monopolies and oligopolies have developed in various forms in many areas such as rail, petroleum, communications, aviation and finance,” Wang Xiaolu, deputy director at the National Economic Research Institute, a state-affiliated think tank, said in a July meeting, according to Chinese media.