Introduction to the special issue on platform economic in China

Abstract

The platform economy helps to improve the efficiency of resource allocation and has become a new driving force of China’s economic growth. However, as it has a natural tendency of getting more concentrated over time, deeply reconstructing industry structure, and inducing tremendous changes toward social life, platform anti-monopoly starts to become a significant issue of social concern. In particular, some of the practices in the platforms are against consumers’ interests, such as distorting search ranking for profit, using big data to discriminate consumers, and breaching personal privacy. In December 2020, China’s Central Economic Work Conference listed ‘strengthening antimonopoly and preventing disorderly capital expansion’ as one of the eight economic priorities for 2021, marking 2021 as the first year of strong anti-monopoly regulation in China. In January 2021, the People’s Bank of China released the ‘Regulations on Non-Bank Payment Institutions (Draft for Public Comments)’, the most notable of which are Article 55 ‘early warning measures for market dominance’, Article 56 ‘Identification of market dominant position’ and Article 57 ‘market dominance regulatory measures’. In February 2021, the General Administration of Market Regulation of China (GAMR) published the ‘Antimonopoly Guideline on the Platform Economy (Draft for Public Comments)’, which provides the criteria for regulatory authorities to prevent, identify, and correct monopolistic practices like refusal to deal, restrict trading and price discrimination. The most notable of the strong regulatory actions in 2021 were the antitrust penalties against Alibaba Group, one of China’s largest e-commerce platforms, and Meituan, an e-commerce platform that focuses on fast-food delivery and other daily life services. In April 2021, Alibaba was penalized by the State Administration of Market Supervision and Administration for having committed ‘restricting merchants to choose one between two competing platforms’ conduct, with a fine of 4% of its 2019 sales of RMB 457.512 billion in China, totaling RMB 18.228 billion. In October 2021, Meituan was penalized for abusing its dominant position in the market for online food and beverage take-out platform services within China. Meituan was required to refund merchants on the platform of 1.289 billion RMB deposits, and to pay a fine of 3% of its 2020 sales of 114.748 billion RMB, totaling 3.442 billion Yuan.