New Internet Algorithmic Recommendation Rules Released, Compliant Companies May Get Dividends, Barbaric Growth Doesn't Work

On March 1, the "Internet Information Service Algorithm Recommendation Management Regulations" (hereinafter referred to as the "Regulations") jointly issued by the Cyberspace Administration of China, the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Administration for Market Regulation officially came into effect. The "Regulations" set clear requirements for algorithm recommendation service providers and a number of prohibited behaviors.

It is understood that the content of the "Regulations" includes: Algorithm recommendation service providers shall provide users with options that are not targeted at their personal characteristics, or provide users with convenient options to turn off algorithm recommendation services. If users choose to turn off algorithm recommendation services, algorithm recommendation service providers shall immediately stop providing relevant services. Algorithm recommendation service providers shall regularly review, evaluate, and verify algorithm mechanisms, models, data, and application results, and shall not set up algorithm models that violate laws and regulations or violate ethics, such as inducing users to indulge or over-consume.

In addition, for minors, the Regulations also mention that algorithm recommendation service providers that provide services to minors shall perform their obligations to protect minors online in accordance with the law, and facilitate minors to obtain information that is beneficial to their physical and mental health by developing models suitable for minors and providing services suitable for the characteristics of minors. Algorithm recommendation service providers shall not push information to minors that may cause minors to imitate unsafe behaviors and violate social ethics, induce minors to develop bad habits, and may affect the physical and mental health of minors, and shall not use algorithm recommendation services to induce minors to become addicted to the Internet.

Jiang Han, a senior researcher at Pangu Think Tank, told reporters: "This new regulation will be a huge change for the entire Internet industry, especially the Internet content industry. We have seen that a series of Internet giants and platform companies represented by ByteDance and Kuaishou are actually currently relying on algorithm recommendations. In a sense, algorithm recommendations have become the underlying logic of the Internet industry, but we have also seen that algorithm recommendations have many problems."

"What we have seen in recent years, such as big data targeting old customers, algorithm discrimination, and some addictions, are actually problems that current algorithms may face. So under such circumstances, the country has issued this regulation, which is, in a sense, an effective and healthy physical examination of the entire market, especially the Internet market, and also regulates the better development of the entire market. After all, the Internet market needs long-term sustainable development, rather than simply relying on algorithms to solve all problems."

On March 1, the Internet Information Service Algorithm Filing System was officially launched. According to the requirements of the Regulations, algorithm recommendation service providers with public opinion attributes or social mobilization capabilities should fill in the name of the service provider, service form, application field, algorithm type, algorithm self-assessment report, and proposed public disclosure content through the Internet Information Service Algorithm Filing System within ten working days from the date of providing services, and complete the filing procedures.

Jiang Han believes: "The introduction of this regulation may lead to comprehensive adjustments for Internet companies. It may even be a reshuffle for some Internet companies. Effective implementation and further maintaining the consumer user experience after implementation are actually what Internet companies need to do most.

This regulation may promote the industry's more standardized development, but it may also lead to a differentiation of the entire industry. Companies that truly comply with regulations may gain more development dividends, while companies that previously only grew wildly may face huge development problems. "

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