Beijing will tighten regulation of online platforms that take advantage of teenage users

China’s cyber watchdog has unveiled new draft rules that will make it difficult for big tech companies like Tencent Holdings and ByteDance to tap video games, live streaming and social media services targeting the country’s 180 million internet users under the age of 18.

The draft of the new regulation, published by the China Cyberspace Administration (CAC) on Monday, marks Beijing’s latest effort to protect minors from online services. China has already banned profit-taking in off-campus tutoring to reduce the burden on students, and has limited time to play video games to three hours a week for teen gamers on Fridays, Saturdays and Sundays.

The draft, which is seeking audience opinions through April 13, goes a step further to cover all online services, including gaming, live broadcasts, audio and video, as well as social media. According to the draft, all online service providers must create a “youth mode” for their services, with clear limits in terms of user time, content and functionality.

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Specifically, ISPs are being asked to place limits on the time minors can spend online, as well as to place caps on all one-time purchases and cumulative daily spending, according to the draft.

The proposed changes come amid persistent reports that underage users are spending excessive amounts on online services, from fees charged on their gaming accounts to giving advice to live streaming stars. Several delegates to last week’s parliamentary “two sessions” meetings publicly lobbied the Chinese government to limit gaming time for minors.

The regulation aims to “strengthen the responsibility” of internet platforms when it comes to “protecting minors online,” according to the CAC, the watchdog that sets rules for online activities.

The recent regulatory tightening comes as shares of Chinese video game and streaming companies take a hit in Hong Kong amid increased volatility in the broader market.

Tencent, the country’s largest gaming company, lost 10 percent on Monday while NetEase, another gaming giant, lost 8 percent. Bilibili, the live streaming platform, fell 19 percent, while short video-sharing app operator Kuaishou Technology fell 13 percent.

If the new draft rules become regulation, which is the most likely scenario, online platforms will have to take into account the physical and mental health of minors when designing, developing and operating their platforms. Companies will also need to provide an adequate relief system for young victims of Internet abuse, and publish a relevant Social Responsibility Report each year, according to the draft.

The new regulatory requirements will translate into higher compliance costs for Chinese tech companies, although major players such as Tencent and ByteDance have already rolled out “youth mode” features.

The draft also targets hardware companies, including smartphone and PC manufacturers, who will need to install secondary protection software before launching their products on the market, or at least provide clear and visible installation instructions for young users.

In addition, the regulation stressed the responsibilities and obligations of platforms in creating and improving anti-addiction systems for online content, restricting online spending of minors, and protecting them from “unhealthy values.”

This article originally appeared in the South China Morning Post (SCMP), the most authoritative audio report on China and Asia in over a century. For more SCMP stories, please explore the SCMP app or visit Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. all rights are save.

Copyright (c) 2022. South China Morning Post Publishers Ltd. all rights are save.