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Angela Huyue Zhang
Says More…

This week in Say More, PS talks with Angela Huyue Zhang, Director of the Center for Chinese Law at the University of Hong Kong and the author of Chinese Antitrust Exceptionalism: How the Rise of China Challenges Global Regulation.

Project Syndicate: Last November, you wrote that new draft guidelines for tech platforms – especially the requirement that users opt in to personalization – could cause significant harm to tech companies. But to what extent might the new guidelines benefit consumers? The rules coming into force on March 1 also target companies that use algorithm-based recommendations in their services but include only an opt-out requirement. Does that strike a better balance between the interests of consumers and tech companies?

Angela Huyue Zhang: My guess is that the opt-out requirement won’t have much of an impact on Chinese tech companies’ business operations. Most Chinese consumers probably won’t opt out from recommendation and personalization services, either because they simply don’t bother to take the extra step or because they don’t realize it is an option. The opt-in requirement, however, could have a drastic and disruptive impact on platform businesses.

But the introduction of such a requirement may not turn out to be as good for consumers as one might assume. As I note in my commentary, when Apple began prompting iPhone users with the opportunity to opt out of tracking, 84% took it. If a similarly large share of Chinese consumers opted out of personalization, collecting and using personal data would become much more costly for both platforms and merchants. The increased cost would eventually be passed on to consumers, with currently-free apps introducing charges and merchants increasing the prices of their products. While surveillance capitalism has been widely criticized, it is important to remember that consumers cannot have their cake and eat it.