Over the course of 2021, the Chinese government promulgated two groundbreaking laws governing the country’s digital economy. The Data Security Law (DSL) and the Personal Information Protection Law (PIPL) were introduced throughout H1 and implemented in H2. Both pieces of legislation were part of a wider crackdown on private-sector internet giants, whose power and influence China’s leaders perceived to have become excessive.
Both the DSL and the PIPL involve heavy new restrictions on the collection, storage, and use of personal data. The regulations have created massive challenges for ad tech service providers and digital ad publishers, as previously standard practices for data collection and ad targeting suddenly became illegal.
During H1 2021, before most of the new rules had fully circulated, China’s largest tech companies reported strong growth in their ad businesses. That all changed in H2, once the wider “techlash” had set in:
To make matters even more complicated, China’s anti-monopoly market regulator is currently drafting new guidelines specifically designed to govern digital ads. Although the Measures for the Administration of Internet Advertising have not yet been fully promulgated, they are expected to further constrain the operational flexibility of China’s largest digital ad publishers.
Read more about growth in China’s weakening ad market here.
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