By Xiong Hongru, Research Department of Innovation Development, DRC & Ma Yuan, Enterprise Research Institute, DRC

Research Report, No.138, 2019 (Total 5638) 2019-8-19

Abstract: With the wide application of a new type of business model based on big data and algorithm driver in the digital economy era, the Internet platform companies’ overcharges on regular customers by identifying their consumption capability has aroused deep concern among the general public. The above-mentioned big-data’s biased approach is a kind of price discrimination, but due to its heavy dependency on data and algorithms, its practice is hard to be acknowledged. This kind of behavior may meet the demand of different levels of consumers and intensifies the dynamic market competition, whereas it will also lead to dented benefits on the part of some consumers, cause damage to the platforms’ market reputation plus complicated social impacts. The removal of big-data’s such performance involves market competition, consumers’ rights and interests, personal data protection and anti-discrimination policies. Consequently, such an issue faces the practical difficulty in the enforcement of laws and regulations, and there are no exact parallels in the world from which to draw templates. It is advisable to take an overall view of the pros and cons of big-data’s biased practice. The government needs to curb the platform companies’ such behavior and weaken their motives and capabilities through intensified market competition and ensure that consumers are entitled to choose their own services. The government also needs to strengthen the regulative capability and enforcement efficiency, revise and improve the rules and regulations of related departments, enhance the platforms’ transparency relating to the rules in setting prices and urge and guide the platforms to abide by self-discipline.

Key words: big-data’s biased approach, price discrimination, Internet platform, to address challenges