“The Chinese government’s new rules seem mostly aimed at shutting down predatory and fraudulent advertising businesses and practices that have popped up,” Ong said. “I’d expect implementation to focus on cleaning up the bad actors first.”
And there are a lot of bad actors. Just this month, a Chinese mobile advertising company called Yingmob was caught distributing malware on 10 million Android devices to the tune of $300,000 per month in stolen ad revenue.
But there are also a lot of legit companies, and China’s mobile ad market has huge potential. According to Strategy Analytics, digital spend in APAC is on tap to rise more than 18%, to just shy of $60 billion.
“Because of this, there are a lot of participants coming to the market, and these companies are uneven in terms of ethics and technology, which may cause unfair competition,” said Ted Gao, VP of Chinese mobile data platform TalkingData.
For example, some shady companies block ads coming from other companies in order to publish their own, he said, or they sometimes use system permissions to kill other people’s ads.
“The scale of the market forces the government to pay attention,” Gao said. “The demand for a standardized and sustaining market is what motivates the government to design certain policies.”
If the government’s new regs do have any impact on ad blocking, it’ll likely be on the default features built into the browser products provided by large companies, such as UC Browser, owned by Alibaba.
“But for other independent plug-in developers, this will not change what they choose to do,” said Andy Fan, founder and CEO of RTB Asia, a fraud detection solution based out of Shanghai. “Consumers will still have many options to block ads if they want to. Since ad blocking is so technical, it cannot be changed by a regulation.”
If the Chinese government does have ad blockers in the crosshairs, Fan’s feeling is that the regs will only be “mildly” enforced in that regard.
“Upgrading browsers or uninstalling plugins is not an easy task and difficult to verify,” Fan said. “But the message may be strongly delivered to major internet companies to let them know now to officially get involved in ad blocking.”
For its part, though, ABP is calling BS.
In his blog post, Adblock Plus operations manager Ben Williams accused the Chinese government of robbing consumers of “what has become a basic right” – the right to exercise control and protect themselves from predatory practices online. It would be a bit ironic if Chinese regulators try to institute laws to crack down on the purveyors of bad ads by removing one way that users have of protecting themselves.
“Recently, in China itself, actually, almost 10 million Android smartphones were infected by malware that generates fake ad clicks,” Williams said, referring to the Yingmob incident in early July. “Now, I’m not saying that those users would necessarily have been completely safe if they’d been running an ad blocker, but ad blocking and other tools that would fall under the ban help to mitigate or obliterate that risk.”