More teeth to check internet monopoly

The State Administration for Market Regulation recently introduced a draft guideline document to prevent internet platform-based economies from becoming monopolies, lower administrative law enforcement and compliance costs for market entities, improve antitrust regulations, advance fair market competition, protect consumer interests, and promote the sector's sustainable and healthy development.

The Fifth Plenary Session of the 19th Communist Party of China Central Committee said that China will build a high-standard market system, improve the fair competition system, and fully implement the negative list system for market access. It particularly emphasized that the country will implement the fair competition review system and enforce the anti-monopoly law.

The Anti-Monopoly Law came into effect in 2008, but in the past decade, leading market players in the internet sector have abused their dominant market positions. In recent years, legislators, experts and the media have called for investigations into such practices and for implementing anti-monopoly regulations.

With China becoming the second largest internet power, after the United States, a variety of new business models have emerged. However, with the continuous expansion of scale, some internet enterprises have gradually lost the internet spirit, giving rise to malpractices such as disorderly competition, false marketing and personal information leakages. All these are damaging to users, thus underlining the need for enforcing anti-monopoly laws.

The State Council, China's Cabinet, released a guideline document on Aug 8, 2019, requiring the market regulator to investigate and punish illegal practices such as abuse of dominant market position to restrict transactions and conduct unfair competition, and prohibit platforms from unilaterally signing exclusive service provision contracts to ensure fair market competition. The latest guideline draft gives more detailed provisions.

The internet sector in China is booming because of an ideal commercial environment. However, following the emergence of giant platform enterprises in various fields, it is important to standardize fair and just competition in the online market.

The draft, if it becomes a regulation, will strengthen anti-monopoly law enforcement, and enable enterprises to better foresee compliance risks, respect and embrace market competition and refrain from abusing their monopolistic position to indulge in unjust competition, thus better protecting the interests of consumers and the public.