A revised antitrust or competition law went into effect on Monday, part of the Chinese government's efforts to control technology companies from monopolizing the Great Wall country's market.
It is understood that it is the first amendment to the Anti-Monopoly Law since it was enacted in 2008.
Under the new legislation, heavy penalties will be imposed on large technology companies that use their market advantage to force small vendors into exclusive business contracts.
It follows a crackdown by Chinese authorities against tech giants that are largely responsible for the largest financial penalties in 2021 for antitrust violations.
Revealing an incident last November 2020, the Chinese government began to control the practice of 'choose 1 of 2' where tech giants instruct vendors not to do business with other rival platforms.
Then in April of the same year, e-commerce giant Alibaba Group Holding was fined 18.2 billion Yuan while Meituan was fined 3.4 billion Yuan in October.
It is said that the total fines collected from such anti-monopoly violations reached 23.5 billion Yuan last year, a 5-fold increase from the 2020 record.
Chinese local media reports state that technology companies contributed 21.7 Yuan or 92% of the penalty.
In the meantime, the new legislation has not yet been applied to government-owned enterprises with a dominant market position.
Like to be reminded that President Xi Jinping has called state enterprises the 'main pillar' of the country's economy.
