China roundup: Games are opium, algorithms need scrutiny ' TechCrunch

Welcome back to TechCrunchs China Roundup! This digest contains the most recent developments in China's tech landscape, and what these mean for people around the globe.Today's tech news cycle in China is asking: Who will Beijing be next? Although regulatory clampdowns are a common feature of China's tech industry, the extent of recent moves is unprecedented. Beijing's message is clear: Tech companies must align themselves with Beijing's interests and objectives.Education curbs hit tech giantsThe motivations of the government are not always ideological. This could result in policies to curb the private tutoring industry in the hopes of alleviating parents and students' pressure. Although recent Beijing orders have severely restricted after-school tutoring, they have also created sympathy for public school teachers who work in lucrative tutoring centers to offset their modest salaries.Internet companies are also feeling the effects of the education crackdown. ByteDance has been building an online education company through an aggressive hiring and acquisition spree over the last few years in order to diversify its ad-based business. According to reports, it plans to cut staff from its education department after recent clampdown.American companies are also being affected by these restrictions. Duolingo, a language learning app, was taken out of several Chinese app stores. Although it is not clear if the move was the result of any policy changes, the government recently banned foreign curricula from schools starting at K-9.Games are opiumIt can be difficult to understand the thoughts of top leaders because messages may come through different government departments or state-affiliated media outlets. They could also carry different weights.Tencent is under investigation by authorities this week. The Economic Information Daily, a Chinese state-run economic newspaper, published an article that described video games as spiritual opium. It also cited the important role Tencent plays within the industry. Tencents shares of NetEase, its smaller competitor, were also affected.It is not the first time Tencent, and the entire gaming industry in general, have been criticized by the government for their negative impact on minor gamers. Tencent has worked to appease authorities by introducing protections that protect young players, such as tightening age controls several times.Tencent, which boasts a vast online empire that includes social networks, music, payments, and games, has also pledged to do more social good with its products. Tencent has also restricted how much time and money children are allowed to spend on games, in response to the state newspaper's recent opinion piece. However, Tencent still relies heavily on addictive game mechanics that entice players to open loot box.Make sure you fix the algorithmsAnother group of tech companies that are feeling the heat are those that rely on machine learning algorithms for content distribution. Along with other government bodies, the Propaganda Department, China Communist Party's watchdog for public expressions, has issued an advisory to improve the study and guidance of online algorithmic recommendations and oversee their implementation.The government's goal is to have more control over how algorithmic Black Boxes affect the information people get. Kuaishou shares, TikToks archrival, plunged following the news. Kuaishous stock has plunged up to 70% since its February blockbuster initial public offer. The Beijing-based short video company is closing Zynn, its overseas app, amid controversy over plagiarism. However, its international user base is growing rapidly. It has recently reached one billion users globally.End of the two-choose oneThis week isn't over. The Wall Street Journal reported Friday morning that China's antitrust regulator was about to fine Meituan (China's largest food delivery platform) $1 billion for allegedly abusing market dominance. Meituan made 114.8 billion Yuan ($17.7 billion) in 2020.Up until recently, China's e-commerce industry had used to force suppliers to choose sides. Alibaba made it illegal for sellers to list on competing platforms. This practice led to a $2.75 million antitrust penalty in April. As it continues to limit the tech power of its tech darlings, we will see what the government does next.