China: New Rules on Algorithm-Based Recommendation Services

A new set of rules published by the Cyberspace Administration of China (CAC) requires companies to allow users to control how their information is used in algorithmic-based recommendations. The rules are set to take effect on March 1, 2022.

The rules require companies that use algorithm-based recommendations on their social media feeds to inform their users about the purpose and basic principles of the technology, and allow them to choose the specific tags that will trigger the operation of the algorithm or to completely opt-out. In addition, the rules prohibit companies from using the technology to influence online public opinion, evade supervision, or engage in illegal activities or activities that might risk public safety. Violation of the rules might result in fines of up to 100,000 Yuan (approximately $16,000).

These rules may be the most far-reaching privacy legislation to be enacted by the CAC in the past year. They are expected to have a significant impact on the business models of technology companies operating in China.