China sets out rules for tech firms’ use of recommendation algorithms

The Cyberspace Administration of China (CAC) has unveiled a 30-point draft of rules governing the use of algorithms by tech companies. This, according to Bloomberg.

The proposed measures prohibit “encouraging dependency and excessive consumption,” as well as any actions that threaten national security or disrupt social and economic order.

Under the new rules:

• Providers must offer users an easy way to view and delete the keywords used by the algorithm to profile them;
• Companies must disclose the basic principles of how recommender systems work, explain their goals and mechanisms in a “conspicuous” manner;
• Providers must delete keywords immediately upon the user’s first request;
• Companies cannot use algorithms for price discrimination based on users’ preferences and habits;
• Providers must regularly evaluate algorithms to avoid intrusive behavior, excessive costs and other actions that undermine public order and morality;
• Providers are prohibited from using models to create fake accounts or manipulate rankings and search results, influence online discourse or evade regulatory oversight;
• Algorithms may not threaten national security, disrupt economic and social order, or infringe the lawful rights and interests of others.

CAC will keep a registry of systems with “attributes of public opinion or potential for social mobilization.” Such algorithms must obtain regulator approval.

The administration also plans to conduct security checks on providers of recommender systems.

Violators face fines of up to 30,000 yuan ($4,600) and a ban on using algorithms.

It is unclear how the regulator intends to implement the proposals or which firms will be affected. The proposed rules could affect, among others, Alibaba, which uses recommender systems on its marketplace, or Apple, directing users to certain products in the App Store.

Earlier in August, Chinese authorities said they would further regulate the activities of technology companies.

In early August, the People’s Bank of China announced its intention to continue to press on crypto trading.

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