The hows and whys of China's intensifying anti-monopoly moves

BEIJING -- In a clear signal that China's ongoing anti-monopoly moves would stay unabated, China's top policymakers Monday stressed efforts to strengthen anti-monopoly regulations and promote fair competition.

Targeting problems such as "savage growth" and "disorderly expansion" among some platform businesses, China has stepped up anti-monopoly regulations, investigating and punishing relevant enterprises in accordance with the law.

"The moves have achieved initial results in preventing disorderly expansion of the capital, with fair market competition order steadily improving," noted the Monday meeting of the central committee for deepening overall reform.

Here follows some of the background, the hows, and whys of China's intensifying anti-monopoly moves.

BROAD CONTEXT: WHY?

Cyberspace is a major target of the recent anti-monopoly crackdown. Thriving on the country's massive market potential and relatively tolerant regulations, China's internet platform companies have rapidly expanded to become an essential part of people's daily life.

Covering a wide range of services like car-hailing, food ordering, and online payment, internet platform companies are a vibrant force in China's economy. At the same time, however, problems of market monopoly, disorderly expansion, and savage growth have become increasingly prominent.

As leading players grew bigger and stronger, concerns over restricted competition, winner-takes-all, price discrimination, personal data leaks, and damage to consumer rights prompted calls for government efforts to fill the regulatory gaps.

In the cyberspace era, other countries share similar qualms over the monopolistic behavior of the internet giants and their potential threat to the market order, making tighter scrutiny of the area a global trend.

Over the last few years, U.S. tech titans, including Google, Apple, Amazon, and Facebook, have been frequent targets of regulatory scrutiny by the U.S. authorities.

POLICIES

China is constantly stepping up efforts in adapting the rule of law regarding anti-monopoly regulation in the internet industry to ensure equal participation in market competition for all market players.

The Draft Revision of the Anti-Monopoly Law, issued in early 2020, added for the first time the provisions for determining the dominant market position of internet companies.

The Central Economic Work Conference last year listed anti-monopoly supervision as one of the key tasks for 2021. It vowed to prevent disorderly capital expansion. Laws and regulations concerning the identification of platform monopolies, management of data collection and use, and protection of consumers' rights and interests will improve, the meeting stressed.

The Guidelines for Anti-Monopoly in the Platform Economy was issued in February to detail a set of rules that could rein in the monopolistic conduct of the country's top internet firms.

MOVES

China's State Administration for Market Regulation (SAMR) imposed an administrative penalty on Alibaba Group on April 10 for the monopoly conduct of implementing an "exclusive dealing agreement," with a fine of 18.228 billion yuan (about 2.82 billion U.S. dollars).

The SAMR announced on April 26 it has started an investigation into internet giant Meituan for alleged monopoly conduct, such as implementing an "exclusive dealing agreement."

The SAMR in July announced a block on the Tencent-driven merger of the two streaming sites Huya and Douyu after an anti-monopoly review.

The SAMR in July ordered Tencent Holdings Ltd. and its affiliated companies to relinquish exclusive rights to music labels.