What GAFAM is to the United States (and much of the rest of the world), BAT is to China. While Google, Amazon, Facebook, Apple and Microsoft stand for the mightiest tech companies from the U.S., the Chinese acronym refers to the triumvirate of search engine Baidu, ecommerce giant Alibaba and digital powerhouse Tencent whose enormous influence over the country’s internet economy has been making the Chinese government nervous for some time.
China is currently drafting a new set of antitrust rules after new laws and regulations introduced in the last couple of years were deemed not sufficient to reign in the companies. Tensions came to a head recently with the decision to suspend the IPO of Alibaba affiliate Ant Financial over concerns that large parts of China’s financial flows were moving away from traditional banks and into an underregulated digital sphere.
Likewise, the ability of the companies to unimpededly collected large amounts of user data and to use their high market shares for monopolistic practices have drawn the ire of regulators. While Baidu controls 76 percent of search volume, 56 percent of all Chinese retail e-commerce goes to Alibaba. Tencent’s market share is a bit harder to quantify, but 78 percent of all Chinese internet users having accounts on messenger app WeChat shows the power of the company which is also the world’s largest game maker. In addition, Tencent and Alibaba control much of China’s fintech market through WeChat Pay and AliPay, while also having earned large shares of the cloud market. When it comes to streaming, all three BAT companies are vying for the top positions in this market as well.
Market shares of U.S. counterparts Google, Amazon and Facebook are not necessarily lower, but issues surrounding these tech giants in the Western world and the continued efforts to control their ever-growing influence also speak volumes about the need for regulations.