Big Data Is Documented Or Recognized As a Monopoly!
On November 10th, China’s State Administration for Market Regulation (SAMR) issued the “Guidelines for Anti-Monopoly in the Platform Economy” for public comment. The purpose is to prevent and stop monopolistic behavior in the platform economy and strengthen and improve anti-monopoly in the platform economy. Supervise, protect fair competition in the market, and safeguard consumer interests and social public interests.
The “platform” mentioned in the consultation draft refers to the Internet platform. A platform economy is an economic form in which the Internet platform coordinates and organizes the allocation of resources. Operators on the platform provide goods or services on the Internet platform.
In accordance with the relevant provisions of the Anti-Monopoly Law, the Draft for Opinions provides anti-monopoly on the platform economy from four aspects: “monopoly agreement”, “abuse of market dominance”, “concentration of operators”, “abuse of administrative power to exclude and restrict competition” guide.
Encourage platform economic operators to proactively report horizontal monopoly agreements
The monopoly agreements in the field of platform economy mainly refer to agreements, decisions, or other concerted actions by platform operators and operators within the platform to exclude or restrict competition.
According to the provisions of the Anti-Monopoly Law, operators are prohibited from reaching and implementing monopoly agreements; monopoly agreements are divided into horizontal monopoly agreements, vertical monopoly agreements, and hub and spoke agreements.
Among them, horizontal monopoly agreements refer to agreements between operators with competitive relationships to fix prices, divide markets, restrict production (sales), restrict new technologies (products), and boycott transactions.
Vertical monopoly agreements refer to agreements between operators and transactions. Agreements such as fixed resale prices and minimum resale prices are reached; hub-and-spoke agreements mean that a competitive operator may use the vertical relationship with the platform operator, or be organized and coordinated by the platform operator to reach a horizontal Agreement on the effects of monopoly agreements.
The consultation draft specifically mentions that “horizontal monopoly agreements in the field of platform economy usually have the effect of severely eliminating and restricting competition. Anti-monopoly law enforcement agencies encourage relevant operators to proactively report on horizontal monopoly agreements and provide important evidence, and at the same time stop suspected illegal acts and Cooperate with the investigation.
The anti-monopoly law enforcement agency can mitigate or waive the punishment for business operators who meet the requirements for leniency.
Implement differential treatment based on big data and algorithms
“Abusive Market Dominant Position Behavior,” combined with the characteristics of the platform economy, from “the determination of market dominance”, “unfair price behavior”, “below-cost sales”, “refusal to deal” and “restricted transaction” Provide guidance on “tying or additional unreasonable trading conditions” and “differential treatment”.
Combining the characteristics of the platform economy, when determining the market share of the operators in the platform economy, you can consider the transaction amount, number of transactions, number of users, clicks, duration of use, or the proportion of other indicators in the relevant market, and consider the continuous market share and time. To determine the operator’s ability to control the market in the field of the platform economy, one can consider “the operator’s ability to control the upstream and downstream markets, hinder and affect the ability of other operators to enter the relevant market, relevant platform business models, network effects, and influence or determine commissions, The ability to flow or other trading conditions, etc.
It is worth mentioning that certain transaction behaviors implemented by Internet platforms based on the advantages of big data and algorithm technology also need to be vigilant about whether they constitute “discriminatory treatment of counterparties with the same trading conditions without justifiable reasons, and exclude or restrict market competition.” When analyzing whether to constitute differential treatment, factors that can be considered include the implementation of differential transaction prices or other transaction conditions based on the payment ability, consumption preferences, and usage habits of the counterparty of the transaction.
The concentration of undertakings under the VIE structure falls within the scope of antitrust review
“The concentration of undertakings involving the agreement control (VIE) structure falls within the scope of the anti-monopoly review of the concentration of undertakings. If the concentration of undertakings meets the reporting standards set by the State Council, the operators should report to the State Council’s anti-monopoly enforcement agency in advance. Those who have not declared shall not be concentrated.”
For the concentration of operators in the platform economy that does not meet the reporting standards, if it has or may have the effect of eliminating or restricting competition, and the following circumstances are met, the Anti-monopoly Law Enforcement Agency of the State Council will investigate and deal with it in accordance with the law: the operator of one party is a start-up, Emerging platforms; the operators participating in the concentration have low turnover due to the free or low-price model; the relevant market concentration is high and the number of competitors is small; other situations that have or may have the effect of eliminating or restricting competition.
For the concentration of operators in the platform economy that has or may have the effect of eliminating or restricting competition, and for the concentration of operators that are not prohibited, the anti-monopoly law enforcement agency may decide to add the following types of restrictive conditions:
Stripping Tangible assets, structural conditions such as the divestiture of intangible assets such as intellectual property, technology, data, or related rights and interests.
Behavioral conditions such as opening network or platform infrastructure, licensing key technologies, terminating exclusive agreements, modifying platform rules or algorithms, etc.
Comprehensive conditions combining structural and behavioral conditions. Relevant units and individuals can feedback to the State Administration for Market Regulation to propose amendments before November 30, 2020.