- Asian tech giants face increased regulatory scrutiny due to shifting political and security priorities.
- Regulators are imposing more severe penalties, moving beyond fines to impact revenue lines.
- Tech firms must invest in compliance, transparency, and local presence.
Regulatory shifts due to politics and Western influence
Asian tech giants, including Shopee, TikTok, and Paytm, have recently faced heightened regulatory scrutiny due to shifting national priorities and the influence of developments in the West.
China’s crackdown on its tech sector exemplifies how political and security concerns have taken precedence over rapid economic growth.
Similarly, countries like Indonesia and India have taken action against tech firms ahead of their respective elections, potentially to garner public support and minimize risks.
Regulators move beyond fines
Regulators across Asia have intensified their scrutiny of tech companies, moving beyond imposing fines to more severe penalties. The Reserve Bank of India’s clampdown on Paytm Payments Bank, essentially shutting down its operations, demonstrates a shift towards stopping revenue lines to drive home the regulator’s disapproval.
In Singapore, the Competition and Consumer Commission has taken a more heavy-handed approach in scrutinizing Grab’s proposed acquisition of Transcab, following criticism of its handling of the Grab-Uber merger in 2018.
The increased regulatory scrutiny presents both opportunities and challenges for the tech industry. While some companies may benefit from their competitors’ troubles in the short term, the long-term effects on investment sentiment and new entrants could be chilling.
To navigate this new reality, startups and established tech firms alike must adapt by investing more in compliance, risk management, and transparency, establishing a strong local presence in target markets, and engaging in effective lobbying activities when necessary.
To read the original article: https://www.techinasia.com/asian-tech-feels-heat-regulators-bare-teeth
