A number of new policies to rectify the disorderly competition on the platform
"One-of-two" restrictions on transactions violate the principle of free and fair competition.
A number of new policies to rectify the disorderly competition on the platform
● Recently, the relevant state departments have stepped up the regulation of Internet platforms, and successively issued more targeted supervision and enforcement measures and anti-monopoly guiding rules for platform enterprises. This is not accidental, sudden and isolated, but a logical development process, and relevant policies in this regard are continuous and constantly improving.
● E-commerce platform implements "two-for-one", which sets up obstacles and barriers for the market to exclude competitors by limiting the counterparty’s right to choose, which violates the market norms of free and fair competition and disrupts the normal market competition order.
● The socialist market economy is essentially an economy ruled by law. The economy ruled by law requires that all economic activities, including those in the Internet field, should be brought into the legal scope for adjustment. This means that the Internet is not a place of extra-legality, and it must be brought into the legal track for governance.
This year’s "Double Eleven" and "Double Twelve" online shopping promotion carnival activities have a different "taste" because of the various platform specification documents frequently issued by relevant state functional departments recently.
For example, the Measures for the Supervision and Administration of Online Transactions (Draft for Comment) clearly states that online trading platform operators shall not abuse their dominant position to interfere with the independent operation of operators within the platform; The Anti-monopoly Guide on Platform Economy (Draft for Comment) (hereinafter referred to as "Draft for Comment") aims to prevent and stop monopolistic behavior in the platform economy, guide operators in the platform economy to operate in compliance with the law, and promote the sustained and healthy development of the online economy.
These normative documents include the long-debated issues of "two-in-one" and low-price dumping in the field of e-commerce, and put forward several situations of abusing market dominance, including "two-in-one" between competitive platforms, exclusive trading, trading with its designated operators, and the counterparty is not allowed to trade with a specific operator.
Regulatory policies are frequently introduced.
Strengthen platform regulation.
Since the rise of e-commerce economy, there has been a constant dispute about "two choices one" between platforms.
From the earliest "3Q War" to the case of JD.COM v. Tmall’s abuse of market dominance, Galanz v. Tmall’s abuse of market dominance, the dispute between Meituan Didi at the beginning of this year, and recently, Shanghai Zhongdan Information Technology Co., Ltd. (hereinafter referred to as Love Inventory) reported to the State Administration of Markets that Vipshop asked merchants to "choose one from two".
On September 11th this year, Aiku reported its real name to the General Administration of Market Supervision that the e-commerce platform "Vipshop" forced the merchants to "choose one from the other", used the market competitive advantage to force the merchants not to cooperate with Aiku, and required the merchants to offline all the goods and activities on Aiku, which seriously damaged the market competition order and violated relevant laws, causing serious economic losses to Aiku and the majority of merchants, and requested the General Administration of Market Supervision to investigate and handle this and maintain the industry order.
In late October this year, the General Administration of Market Supervision issued the Measures for the Supervision and Administration of Online Trading (Draft for Comment), which clearly stated that operators of online trading platforms should not abuse their dominant position to interfere with the independent operation of operators within the platform, and should not unreasonably restrict or attach unreasonable conditions to the business cooperation between operators within the platform and other platforms.
Just entering November, the General Administration of Market Supervision released the "Opinion Draft".
"We have been paying close attention to these two drafts for comments, which have been waiting for a long time. It is really necessary!" The person in charge of love inventory told the reporter of Rule of Law Daily.
Rectifying the economic order of the Internet market, standardizing the competition mode of the platform economy and creating a fair competition e-commerce market environment have become the key goals of the central government. In fact, the layout planning began as early as a year ago.
On August 8, 2019, the General Office of the State Council published the Guiding Opinions of the General Office of the State Council on Promoting the Healthy Development of Platform Economy, which clearly stated that "it is strictly forbidden for the platform to unilaterally sign exclusive service provision contracts to ensure the fair participation of market participants related to the platform economy".
Then in October of that year, the State Council promulgated the Regulations on Optimizing the Business Environment, which stipulated that relevant government departments should strengthen anti-monopoly and anti-unfair competition law enforcement, effectively prevent and stop monopolistic behavior, unfair competition behavior and abuse of administrative power to exclude and restrict competition in market economic activities, and create a fair competitive market environment.
Wang Xianlin, a member of the Expert Advisory Group of the the State Council Anti-monopoly Committee and vice president of the china law society Economic Law Research Association, said that recently, the relevant state departments have strengthened the regulation of Internet platforms, and successively issued more targeted supervision and enforcement measures and anti-monopoly guiding rules for platform enterprises. This is not accidental, sudden and isolated, but a logical development process, and relevant policies in this regard are continuous and constantly improving.
Clearly define the trading situation
The challenge behind it still exists.
It is reported that as soon as the "Opinion Draft" was published, it caused a strong reaction in the capital market. The reason is that the "Opinion Draft" clearly responded to several key issues in regulating the monopoly of platform economy.
For example, this Opinion Draft puts forward several situations of abusing market dominance, including limiting "two-in-one" between competitive platforms, exclusive trading, trading with its designated operators, and the counterparty may not trade with specific operators. This limitation may be realized by written agreement, by telephone or oral negotiation with the counterparty, or by setting restrictions or obstacles in terms of platform rules, data, algorithms and technologies.
Chen Qunfeng, a professor at the Law School of Minzu University of China, pointed out that the "Opinion Draft" stipulates whether the determination constitutes a restricted transaction or not. First, when the platform operator imposes restrictions through punitive measures and thus causes direct damage, it can generally be considered as a restricted transaction; Second, when the platform operators impose restrictions through incentives, although it may have certain positive effects, if it has obvious effects of excluding and restricting competition, it will also be considered as a restricted trading behavior.
Wei Shizhen, a lawyer of Beijing Dacheng Law Firm, who once represented the first administrative monopoly lawsuit in China, said that the current departmental regulations are not clear enough for the enforcement operation of administrative organs, and the efficiency is not high enough. In particular, the threshold for the implementation of the current anti-monopoly law is relatively high. If you rely on the enterprises whose interests have been damaged to help themselves, there are problems such as high legal cost, difficult proof and long time to defend rights. The "Opinion Draft" has made detailed provisions on the steps, methods and considerations of identifying the monopolistic behavior of the platform economy, which is conducive to the development of anti-monopoly law enforcement on the Internet.
Taking the definition of relevant market as an example, this is the first step to identify monopolistic behavior. However, due to the existence of market segments, it is difficult to define them, which often leads to the difficulty of anti-monopoly work.
In this regard, the Opinion Draft clarifies the principle of case analysis of relevant market definition, and different types of monopoly cases have different actual needs for relevant market definition. In a specific case, if the direct factual evidence is sufficient, the behavior that can only be implemented by relying on the dominant market position lasts for a long time and the damage effect is obvious, and it is insufficient or very difficult to accurately define the relevant market conditions, it is not necessary to define the relevant market and directly determine that the operators in the platform economy field have implemented monopolistic behavior. This will help law enforcement agencies to skip the first hurdle and better carry out anti-monopoly law enforcement.
However, Chen Qunfeng believes that although the Opinion Draft puts forward the above considerations for operators in the platform economy with market dominance to constitute restricted trading behavior, due to the lack of clear provisions, there are still some challenges in practice in how to identify operators in the platform economy with market dominance.
Huang Yong, a member of the Expert Advisory Group of the Anti-monopoly Committee of the State Council and a professor at the Law School of the University of International Business and Economics, said: "The platform economy is a multilateral symbiotic economy. Before making a negative evaluation of the platform behavior, it is necessary to carefully and fully evaluate the interests of consumers, merchants, the platform’s own interests, and social and national interests involved in the business model adopted by the platform. To treat the business strategies of the same platform and different platforms differently, there may be different data, algorithms, privacy and architecture behind the seemingly same platform business model, so we must follow the principle of case handling and respect for characteristics. "
"Choose one from two" is getting worse.
Disrupt the order of market competition
With the intensification of platform competition in e-commerce business activities, the phenomenon of "choosing one from the other" has become increasingly fierce, and the harm of this behavior has become increasingly apparent.
According to Wang Xianlin, as a typical performance of restricting transactions in the field of e-commerce, e-commerce platforms implement "two-for-one", set obstacles and barriers for the market to exclude competitors by limiting the right of choice of the counterparty, which violates the market norms of free and fair competition, disrupts the normal market competition order, hinders the free flow of resources and information, and violates the concept of open sharing of the Internet.
At the same time, the "two-to-one" behavior of e-commerce platform directly damages the trading opportunities and economic interests of other e-commerce platform operators (competitors) and e-commerce operators by forcing operators (partners) in the platform to stand in line and giving up the opportunity to cooperate with other platforms, and also obviously affects consumers’ choice opportunities and consumption interests. Therefore, the "two-in-one" behavior ultimately destroys the business environment in the field of e-commerce, damages the interests of small and medium-sized enterprises, and is not conducive to the innovation of mass entrepreneurship and the standardized and healthy development of platform economy.
Chen Qunfeng believes that the high concentration of platform economy brings great convenience to users, but it also leads to too high market entry threshold, making it more difficult for small and medium-sized enterprises to enter the market, hindering full competition in the market, undermining the business order, and damaging consumers’ right of independent choice and social public interests.
"Once the e-commerce platform is in a monopoly position, its dominance over small and medium-sized operators will become very strong. At this time, the platform abuses the market advantage to force merchants ‘ Choose one from two ’ Standing in line, small and medium-sized businesses dare to speak out because they will not survive without the platform. " Wei Shizhen said.
The complaint and report materials of Aiku to the General Administration of Market Supervision show that over 400 brand merchants were affected by the "two choices" of Vipshop. In November alone, there were nearly 150 clothing brand merchants affected, and the interests of merchants, shopkeepers and consumers were damaged at the same time, which brought interference to the normal operation and development of the platform.
Inclusive and prudent supervision
Guarantee the innovation and development of the platform
The interviewed experts are generally happy and cautious about the introduction of the above-mentioned series of new regulations. They think that although they can limit the disorderly competition in the platform industry to a certain extent, they still face some challenges in implementation. The extent to which the Opinion Draft can solve the focus problems in practice still needs to be tested by the practice of individual cases, but this does not affect the public’s expectation that it can protect fair competition in the market, safeguard consumers’ interests and social public interests.
"The Internet is like a double-edged sword. Innovation and supervision must walk on two legs. If innovation is encouraged at the expense of supervision, it will eventually have an adverse impact on the entire e-commerce industry." Wei Shizhen said.
Chen Qunfeng believes that for the future Internet monopoly problem, a problem, a standard or a concept will be further refined through one case in practice. It is expected that the regulatory authorities will launch a law enforcement case as soon as possible for reference after these two exposure drafts are implemented.
In Wang Xianlin’s view, the socialist market economy is essentially an economy ruled by law. The economy ruled by law requires that all economic activities, including those in the Internet field, should be brought into the legal scope for adjustment. This means that the Internet is not a place of extra-legality, and it must be brought into the legal track for governance.
Huang Yong also suggested that once the regulatory concept of the platform model is determined, it should be further implemented and enforced through the determined regulatory policies and rules. For new things like the internet, we should adopt an inclusive and prudent supervision method. Under the guidance of the concept of inclusive and prudent supervision, law enforcement agencies should not go beyond the boundaries of uncertain rules, so as not to unduly punish and amplify the uncertainty of rules, thus affecting market confidence and limiting the innovative development of the platform.
Huang Yong pointed out that the Supreme Law’s view in the judgment of "3Q case" provided some guidance on the consideration dimension of anti-monopoly law enforcement in the platform economy, that is, the development of the Internet depends on free competition and scientific and technological innovation, and the Internet industry encourages free competition and innovation, and the freedom of competition and innovation must be based on not infringing on the legitimate rights and interests of others. The healthy development of the Internet needs an orderly market environment and clear market competition rules as a guarantee. Whether it belongs to free competition and innovation encouraged by the spirit of the Internet still needs to be judged by whether it is conducive to establishing an equal and fair competition order, and whether it is in line with the general interests of consumers and social public interests, rather than being regarded as free competition and innovation only by some technological progress. Otherwise, anyone can arbitrarily interfere with other people’s technological products or services under the pretext of technological progress, which leads to the practice of "jungle law" in the name of technological progress and innovation. (Reporter Wan Jing)