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China reveals that it could be years before its pioneering rules for algorithms are a reality

The draft regulations target algorithms used by tech companies to fine-tune their recommendations and drive business.

It will take China nearly three years to set up governance rules for algorithms, as per a statement by its cyberspace watchdog, Cyberspace Administration of China (CAC), according to a Reuters report. CAC said that it plans to formulate professional evaluation teams to analyse the mechanism of the algorithm thoroughly, the report added. 

What did the CAC say? CAC’s statement advised the companies to ensure algorithms uphold core values of socialism and become “fair and transparent”, Reuters reported.  The watchdog also called for the development of systems for algorithm safety and responsibility.

Why it matters: China has doubled down on its efforts to constrict the growing influence of the tech sector in recent years. It has launched investigations into large companies like Alibaba, Tencent, Didi, ByteDance, etc. in addition to passing sweeping regulations like the Personal Information Protection Law (PIPL), the world’s strictest data privacy law reportedly. Algorithms are deployed by most tech companies around the world. Therefore, China’s crackdown will shape how other countries deal with algorithms.

The reason behind China targeting algorithms: Some of the biggest tech companies use algorithms to fine-tune their content recommendations on which a customer will spend more money and time. They use historical data to achieve this goal. Beijing is looking to tighten its grip on algorithms because they are becoming the linchpin of most companies as they grow into billion-dollar businesses.

How it happened: CAC released the draft rules to regulate recommendation algorithms on August 27. The regulator said that the comments could be sent by September 26. It had not laid down a specific timeline for implementation then. 

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Types of algorithms in the crosshairs of new regulations include:

  • generative or synthetic, 
  • personalised recommendation, 
  • ranking and selection, 
  • search filter,
  • dispatching and decision-making.

Some of the responsibilities of tech companies using algorithms will include:

  • Upholding mainstream value orientations, optimising algorithmic recommendation service mechanisms, vigorously disseminating positive energy, and advancing the use of algorithms in the direction of good.
  • Preventing use of unlawful or harmful information as keywords into user interests and the set-up of discriminatory or biased user tags.
  • Improving identification of illegal and harmful content and ceasing the transmission of such content as soon as it is discovered.
  • Making recommendation algorithms used for search results, rankings, selections, push notifications, and other such use cases, transparent and understandable in order to avoid creating a harmful influence on users or triggering controversies or disputes.
  • Notifying users of the circumstances of the algorithmic recommendation services they provide and publicising the basic principles, purposes, operational mechanisms, etc.
  • Protecting laborers’ rights and interests while carving out work schedules, such as that of delivery workers for food delivery platforms.
  • Looking after the consumers’ lawful rights and interests and avoiding the use of algorithms to carry out an unreasonably differentiated treatment in conditions such as transaction prices on the basis of consumers’ tendencies, trading habits, and other such characteristics.
  • Maintaining confidentiality of personal information, private information, and commercial secrets.

Recommendation algorithms should not be used for:

  • Algorithmic models that go against public order and good customs, such as by leading users to addiction or high-value consumption and companies should regularly examine, verify, assess, and check algorithmic mechanisms, models, data, and application outcomes, etc.
  • Activities harming national security, upsetting the economic order and social order, infringing the lawful rights and interests of other persons, and other such acts prohibited by laws and administrative regulations.
  • Fake accounts, giving false likes, comments, reshares, etc, or engage in traffic hijacking.
  • Self-preferential treatment, and unfair competition by influencing online public opinion, or evading oversight in addition to blocking certain information, over-recommending, and manipulating topic lists or search result rankings. They should not control hot search terms or selections. 
  • Online addiction of minors. The algorithms must avoid influencing minors to imitate unsafe behavior, carry out acts violating social norms, or lead minors towards harmful tendencies that affect their physical or mental health. 

Rights of users under the draft regulations are: 

  • A choice to not have their individual characteristics targeted by recommendation algorithms and be allowed to choose, revise, or delete user tags used by these algorithms.
  • A convenient option to switch off algorithmic recommendation services and should immediately cease providing related services if the user chooses to switch off.
  • Users have the right to seek an explanation as well as seek measures from companies deploying algorithmic services, to improve or remedy the situation in which algorithms have a major influence on their rights and interests.
  • Permit social oversight and set up convenient systems for users to file complaints, and such complaints must be promptly handled. Users must also be able to file appeals and receive feedback.

CAC stipulates that the government must:

  • Establish a categorised and graded management system of companies providing recommendation algorithms on the basis of public opinion properties or capacity for social mobilisation, the content types, the scale of users, the sensitivity of the data handled by the algorithmic recommendation technology, the degree of interference in user conduct, etc.
  • Conduct security assessment, supervision, and inspection of recommendation algorithms, and give suggestions to correct discovered problems, and provide a time limit for rectification. Companies must retain logs for a period of at least 6 months under the new rules.
  • Penalise with a mere warning and order of rectification to fines up to 30,000 yuan and suspension of services depending upon the Article violated.

The big picture: Many countries around the world are exploring ways to regulate technologies and the companies that sell them. The US and European Union are discussing broader laws around artificial intelligence (AI) instead of algorithms, according to a CNBC report. 

  • The EU issued a draft law called the Artificial Intelligence Act to aid “the development of a single market for lawful, safe and trustworthy AI applications” and pushing innovation in the space, the report explained. 
  • The law has “specific requirements that aim to minimise the risk of algorithmic discrimination.”
  • The American government has urged tech companies to tweak their algorithms to root out false information and use trustworthy AI, and it singled out Facebook for its inaction. 

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I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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