Encouraging competition, boosting innovation

Anti-monopoly moves underline fair practices, healthy digital economy

China's efforts to step up regulation of "big tech" companies and antitrust enforcement will help stimulate innovation, ensure fair competition and promote the high-quality development of its sprawling digital economy, government officials, company executives and industry experts said.

Their comments came as technology giants across the world, including those in China, have been facing increasing challenges from accusations of monopolistic behavior. Hence, antitrust measures have become an important "gatekeeper "worldwide to maintain healthy market development.

China is working to strike a balance between regulating monopolistic, unfair market behavior and encouraging internet-based companies to pursue next-generation innovation, commentators said.

Starting from December, a string of Chinese internet heavyweights, including Alibaba Group Holding Ltd, Tencent Holdings Ltd, JD.com Inc, Meituan and Suning.com Co, have been fined for involvement in cases of violation of the anti-monopoly law.

Wu Zhenguo, director of the antimonopoly bureau of the State Administration for Market Regulation, the nation's top market regulator, said the digital economy has developed rapidly in recent years. While it improves the quality of economic development and provides consumers with greater convenience, competition issues also emerged down the line, which is a common problem faced by global antitrust enforcement authorities.

On digital platforms, the "winner-takes-all effect" is prominent, and strong players normally grow even stronger. This is an area prone to an oligopoly situation where one or several players dominate, Wu said in a written interview with Antitrust Source, an online periodical edited and published by the American Bar Association.

According to him, an enterprise that operates an online platform has the dual attributes of being an enterprise and a market operator, and can easily slip into monopoly conduct that restricts or eliminates competition, harms consumer interests, and hinders industry innovation and development. Such companies can do so by manipulating market forces, exploiting their position as platform managers, and abusing their advantages in data, capital and technology, Wu said.

Given such considerations, beefing up anti-monopoly law enforcement in key sectors, including platform enterprises, is a top priority for the regulator this year, he said.

The moves are part of China's broader efforts to rein in monopolistic behavior and to maintain fair competition. The nation promised strengthened enforcement of antimonopoly and anti-unfair competition laws in an outline on promoting the building of a rule of law government from 2021 to 2025, which was published in August.

On Aug 17, the State Administration for Market Regulation issued a draft regulation for the internet sector, which aims to ban and prevent unfair competition and prohibit business operators from using technologies to hijack traffic or influence users' choices.

According to a document published on the administration's website, business operators should not use data, algorithms or other technical information or means to influence users' choices, hijack traffic or disrupt the operations of website products and services provided by other business operators.

The rules, open to public feedback until Sept 15, require internet-based companies not to use technical means to illegally capture or use other business operators' data.