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Scandals In China Bring Calls For More Regulation Over Tech Companies

STEVE INSKEEP, HOST:

Plenty of Americans have been asking if big tech companies are too powerful, and it turns out people are posing a similar question in China. Just as in the United States, tech companies in China are essential to economic growth. But in China, recent scandals have changed the story. Here's NPR's Emily Feng.

EMILY FENG, BYLINE: January weather in Beijing regularly drops to subzero temperatures. That does not stop dozens of angry landlords from lining up outside this Beijing office each day. Here's one of them.

UNIDENTIFIED LANDLORD #1: (Through interpreter) This issue between landlords and renters, we're at the end of our rope.

FENG: These landlords are lining up outside the offices of Danke, one of China's largest rental startups. It rented out more than 400,000 apartments, mostly around Beijing. Danke caters to young renters looking for cheap digs. It even gave them online loans if they could not pay their rent upfront. But then this winter, Danke went bust. It took rent money but stopped paying landlords, who then evicted their tenants. Here's another landlord. They wanted to remain unnamed because they're still petitioning Danke for money.

UNIDENTIFIED LANDLORD #2: (Through interpreter) Frankly speaking, the state did a bad job regulating, and Danke has pushed this rental conflict onto our shoulders.

FENG: Allen Wang moved to the tech hub of Shenzhen after graduating college. When Danke went bust, his landlord confronted him outside the apartment.

ALLEN WANG: (Through interpreter) The guy she brought with her was a locksmith. This was our first time meeting the landlord.

FENG: They were able to compromise that day, but Wang had to move out early and lost nearly a year of rent - and his naivete.

WANG: (Through interpreter) I now have a much deeper understanding of capitalism. The ills of capitalism, the disordered growth of these companies, come at a high cost for regular folks.

FENG: Dissatisfaction with China's rampant version of capitalism is also why many support regulatory action against Ant Group. Ant is run by Jack Ma, China's best-known entrepreneur, and the company has become one of the world's most powerful financial firms. It processes trillions of dollars of online payments a year. It has huge amounts of consumer data. That led to accusations that it squeezed out competitors and gave predatory loans to consumers.

Ant was supposed to go public in Hong Kong and Shanghai last November and become the world's biggest ever IPO. Until...

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED REPORTER: All of that appears, this morning, to be going up in smoke.

FENG: Ant's listing was postponed indefinitely. As of this month, Alibaba, Jack Ma's other company, is under an anti-monopoly investigation. And while that's cost mom and pop investors, many people in China went online to express their support for the regulators, not Alibaba.

XU QINGDUO: I hope they can learn to compromise or balance between profit-seeking and the taking care of their employees.

FENG: Xu Qingduo is a Beijing-based political analyst. He says a string of other e-commerce scandals have fed social dissatisfaction. These scandals include a delivery man working for a company owned by Alibaba who set himself on fire this month to protest unpaid wages.

XU: There are labor laws to protect the interests of the delivery drivers, but it seems there's a lack of proper implementation in real life.

FENG: This January, an employee at Pinduoduo, a Chinese e-commerce startup, suddenly dropped dead after working 380 hours a month. Her death and the company's unapologetic attitude caused a public uproar.

(SOUNDBITE OF VIDEO)

UNIDENTIFIED PERSON: (Non-English language spoken).

FENG: This is another Pinduoduo employee who was fired after criticizing the company's work conditions online. He, like many employees, says they have to work at least 300 hours a month.

(SOUNDBITE OF VIDEO)

UNIDENTIFIED PERSON: (Non-English language spoken).

FENG: It's an extreme version of 996, the Chinese term for working from 9 to 9, six days a week. It's a common schedule at tech firms, where more and more young graduates and migrant workers are employed.

Suji Yan is the founder of a tech startup himself. He's also an advocate for humane working conditions in tech. Two decades ago, factories making smartphones and textiles had the worst working conditions. But now it's tech firms.

SUJI YAN: People actually realize it's not only related with factory worker. Actually, it's going to be related with everyone.

FENG: Everyone, meaning it's the tech industry's time of reckoning in China as well.

Emily Feng, NPR News, Beijing.

(SOUNDBITE OF PHILANTHROPE'S "RELIEF") Transcript provided by NPR, Copyright NPR.