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Platforms: Breakup Not Officially Pondered

Aug 23-2022   



Since 2020 a new round of anti-monopolistic actions has been sweeping across the world, including China. By combing through official guidelines promulgated in recent years, two researchers concluded that over-pessimism cannot be justified and the Chinese authorities do not see ‘breaking up a platform’ as a feasible solution.

 

Prof. Xu Jianguo and Prof. Li Huixuan, respectively of the NSD and Beijing Technology and Business University, weighed in on the overall direction of China’s anti-monopoly measures against platforms in a recent media commentary. They traced the fast development of global and Chinese platform companies since 2007 and its resultant transformations of people’s work and life. But their expansion has run hard into the wall of anti-monopoly waged in Europe, the US, and China since 2020.

 

Galvanized by public ire over such practices as ‘my-platform-or-the-other forced upon merchants,’ ‘milking frequent users with higher price through big data manipulation,’ and ‘bundling transaction,’ the Chinese authorities have made a series of moves to rein in the platforms, including billions of yuan in fines on Alibaba and Meituan.

 

However, the two professors believe that over-pessimism cannot be justified as platforms represent the future of businesses and are needed by countries to participate in global competition. What separates platforms from traditional enterprises is that the former builds a market and ecosystem for producers, sellers, servicers, and retailers and derives incomes from a variety of service fees. As such, limiting the growth of platforms would be tantamount to blunting the development of market. Instead, they should be held accountable for unfair competition behavior.

 

High-level documents and messages from government officials have repeatedly stressed ‘regulating while facilitating development.’ Large-scale platform enterprises are expected to undergo regulated, transparent and predictable regulatory oversight to rehabilitate and improve global competitiveness. Prof. Xu and Prof. Li sifted through official documents and found that the authorities do not intend to break up any platforms. On their part, the platforms should study the anti-monopoly negative list, understand their business boundaries, and install future-oriented strategies, suggested the professors.

Platforms: Breakup Not Officially Pondered

Aug 23-2022   



Since 2020 a new round of anti-monopolistic actions has been sweeping across the world, including China. By combing through official guidelines promulgated in recent years, two researchers concluded that over-pessimism cannot be justified and the Chinese authorities do not see ‘breaking up a platform’ as a feasible solution.

 

Prof. Xu Jianguo and Prof. Li Huixuan, respectively of the NSD and Beijing Technology and Business University, weighed in on the overall direction of China’s anti-monopoly measures against platforms in a recent media commentary. They traced the fast development of global and Chinese platform companies since 2007 and its resultant transformations of people’s work and life. But their expansion has run hard into the wall of anti-monopoly waged in Europe, the US, and China since 2020.

 

Galvanized by public ire over such practices as ‘my-platform-or-the-other forced upon merchants,’ ‘milking frequent users with higher price through big data manipulation,’ and ‘bundling transaction,’ the Chinese authorities have made a series of moves to rein in the platforms, including billions of yuan in fines on Alibaba and Meituan.

 

However, the two professors believe that over-pessimism cannot be justified as platforms represent the future of businesses and are needed by countries to participate in global competition. What separates platforms from traditional enterprises is that the former builds a market and ecosystem for producers, sellers, servicers, and retailers and derives incomes from a variety of service fees. As such, limiting the growth of platforms would be tantamount to blunting the development of market. Instead, they should be held accountable for unfair competition behavior.

 

High-level documents and messages from government officials have repeatedly stressed ‘regulating while facilitating development.’ Large-scale platform enterprises are expected to undergo regulated, transparent and predictable regulatory oversight to rehabilitate and improve global competitiveness. Prof. Xu and Prof. Li sifted through official documents and found that the authorities do not intend to break up any platforms. On their part, the platforms should study the anti-monopoly negative list, understand their business boundaries, and install future-oriented strategies, suggested the professors.