Anti-trust Abuse in Chinese Tech
One of the most stunning things I found living in China is just how brazenly tech companies abuse their monopolies to suppress their competition. Compared to what Chinese tech companies routinely do to each other, Microsoft’s abuse of Netscape in the early 2000’s looks almost sportsmanlike.
In China, Tencent’s Wechat dominates messaging and social media. It’s essentially Facebook, but also with a monopoly on messaging as well. If you want to share a link with your network, or send a message to a friend, you’ll have to go through Wechat. With such power comes a huge potential for abuse, and Wechat doesn’t hold back.
Let’s say you want to share a link to a shirt you found on Taobao (essentially the Chinese equivalent of Amazon). First, you’ll find that Taobao can’t share directly into Wechat. Taobao is owned by Alibaba, which is a competitor to Tencent, so Wechat doesn’t allow Taobao to share directly. Even if you were to copy a URL to the item on Taobao to send the link to your friend, Wechat won’t allow the link to be opened.
Taobao gets around this by giving users a string of text to send to their friend. The text instructs the friend to copy the text into their clipboard, and then open the Taobao app manually on their phone. Then, the Taobao app reads the users’ clipboard when it’s opened, and pulls up the product page. Amazingly, this workaround has become so common due to Tencent’s blocks on competitors that users in China know to expect it and are used to copying text to their clipboard and opening apps to share.
Want to share a link to Taobao on Wechat? Simple! Copy this text, send it to your friend, then they copy the text, then open up the Taobao app with the text in their clipboard. Who needs clickable links?
It doesn’t just stop there - Wechat also has a rapidly growing ecosystem of mini-programs, which are like webpages that can run inside of Wechat, but have full integration to Wechat payment, and users are identified by their Wechat account. Of course, if Tencent views a company as a threat, they’re not allowed to have a mini-program on the platform either.
Meanwhile, products backed by Tencent are allowed the full support of the Wechat platform. Rather than shopping on Taobao, why not use Tencent-backed JD? JD has full integration with Wechat, and a slick miniprogram so you can easily shop and share without ever leaving Wechat.
Imagine if Google were to just block links to Amazon from being opened in Gmail, or if Facebook simply refused to allow anything from Twitter or Google to be shared at all. Why bother competing with other products when you can just directly block them? And yet, this is how daily life on the Chinese internet works.
It’s not just Wechat that’s to blame for abusing their position. In 2010, QQ and 360 got into a fight over providing anti-virus software. QQ is the messaging precursor to Wechat in China, and they began bundling anti-virus software with their product. 360 was the dominant maker of anti-virus software at the time, so, feeling threatened, 360 responded by reporting to users that QQ is spyware. As a response, QQ simply refused to run on any computer that had 360 installed, forcing users to choose between having QQ messenger installed or 360 anti-virus. Since QQ was the dominant messaging platform at the time, this forced users to uninstall 360 if they wanted to keep talking with their friends. 360 eventually caved and started working with QQ. This would basically be like if Microsoft, after seeing Firefox eat into Internet Explorer’s market share, simply said that if you wanted to use Microsoft Word you have to uninstall Firefox.
I can’t understand why behavior like this is so tolerated in Chinese tech. The victims of this sort of behavior aren’t even foreign companies and firms but rather Chinese startups and Chinese consumers. This must be hurting innovation in China as the threat of being cut off from Wechat is effectively a death sentence for tech startups, and Wechat has no qualms about using its monopoly power against any competitor it views as a threat.