Internet companies with data on more than 1 million clients need clearance

Internet companies with data on more than 1 million users should seek clearance from a security review before being listed in overseas stock exchanges, according to a new regulation on cybersecurity review unveiled on Tuesday.

Internet platform operators have to apply for security review before submitting a listing application to foreign security regulators. They will not be allowed to be listed abroad if reviews find a risk to national security.

The regulation aims to bolster data security and further safeguard national security.

The regulation, meant to implement the Data Security Law, was issued by 13 government agencies, including the Cyberspace Administration of China and the Ministry of Public Security, and will come into effect on Feb 15.

On Tuesday, the administration and three other authorities also unveiled a regulation on strengthening the management of algorithms related to internet information services to foster the "healthy" and "orderly" development of the industry.

The administration said that algorithms, widely applied in various areas, have injected vitality into socioeconomic development, but their improper application has also caused problems and disrupted the order of cyberspace.

For instance, some internet service providers were found taking advantage of algorithms to give different prices to clients, based on assessments of their consumption preferences and income levels by using big data, while others were discovered luring young netizens through algorithms and cajoling them to spend too much time surfing the internet, it said.

To solve these problems, the regulation, which will come into effect on March 1, has ordered algorithm-related service providers to tell users what algorithms are used, how they work and why they are applied, it said.

The regulation states that algorithm-related service suppliers should give users the right to choose whether to implement their services, adding that the services need to be stopped if users do not agree with them.

China has stepped up efforts to guarantee cybersecurity while promoting internet-related industrial development in recent years.

In addition to the Data Security Law, the country passed its Personal Information Protection Law in November and has urged government departments to increase inspections of app markets to prevent them from improperly or excessively collecting internet users' information.