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China's Tech Regulators Strike Again

When Apple began asking iPhone users whether they wanted to opt out of data tracking, 84% said yes – dealing a major blow to platforms whose business models depend on the collection and sale of user data. This is an ominous sign for Chinese tech companies, which now face the prospect of much tougher data regulations.

HONG KONG – ByteDance, the parent company of the popular social-media platform TikTok, has a not-so-secret weapon. Its powerful algorithms are able to predict users’ preferences with precision and recommend content they actually want to see, thereby keeping them glued to their screens. But ByteDance may soon have to sheathe that weapon – or, at least, dull its blade.

Internet-platform companies in China are facing a slew of new data regulations that could curtail the use of recommendation engines. For starters, the Personal Information Protection Law, which took effect this month, requires platforms to allow users to opt out of personalized content and targeted ads.

But China may soon go much further. Its internet regulator, the Cyberspace Administration of China (CAC), recently issued new draft guidelines that entail a host of restrictions on the collection and processing of data and its transfer across borders. Notably, apps would have to obtain explicit consent from users before collecting or using data to make personalized recommendations. In other words, individuals would have to opt into personalization, rather than opting out of it, as is the current norm.