Digital competition reform resources
While I’m finishing off a briefing on digital competition reforms in key jurisdictions, I wanted to share some resources I’ve found useful, and an infographic I’m experimenting with summarising the mix of evolution via case-by-case enforcement, changes to enforcement practice and rules, and up-front regulations under consideration in ????????????
Copied below are automated translations (by Microsoft and Apple respectively) of China’s guidelines on digital competition enforcement from February 2021, and draft provisions from August 2021 on by-laws prohibiting unfair competition on the Internet.
Chapter I General Provisions
Article 1 Purpose and basis of the Guide In order to prevent and stop monopolistic behavior in the field of platform economy, protect fair competition in the market, promote the standardized, orderly, innovative and healthy development of the platform economy, and safeguard the interests of consumers and social and public interests, these guidelines are formulated in accordance with the Antimonopoly Law of the People’s Republic of China (hereinafter referred to as the Antimonopoly Law) and other legal provisions.
Article 2 Related concepts
(1) Platform, the platform referred to in this Guide as an Internet platform, refers to the form of commercial organization that enables interdependent bilateral or multilateral subjects to interact under the rules provided by specific carriers through network information technology, so as to jointly create value.
(2) Platform operators refer to operators who provide Internet platform services such as business sites, transaction matching and information exchange to natural persons, legal persons and other market entities.
(3) The operator on the platform refers to the operator who provides goods or services (hereinafter referred to as commodities) on the Internet platform.While operating the platform, platform operators may also provide goods directly through the platform.
(4) Operators in the field of platform economy, including platform operators, platform operators and other operators participating in the platform economy.
Article 3 Basic Principles Anti-monopoly law enforcement agencies should adhere to the following principles for anti-monopoly supervision in the field of platform economy:
(1) Protect fair competition in the market. Adhere to the equal treatment of market subjects, focus on preventing and stopping monopolistic behavior, improve the legal norms for the recognition of monopolistics of platform enterprises, protect fair competition in the field of platform economy, prevent the disorderly expansion of capital, support the innovation and development of platform enterprises, and enhance international competitiveness.
(2) Scientific and efficient supervision according to law. The basic systems, regulatory principles and analytical frameworks determined by the Antimonopoly Law and relevant supporting laws, regulations and guidelines are applicable to all market entities in the field of platform economy. According to the development status, development law and characteristics of the platform economy, and in combination with the specific situation of cases, anti-monopoly law enforcement agencies will strengthen competition analysis and legal argumentation, constantly strengthen and improve anti-monopoly supervision, and enhance the pertinence and scientific nature of anti-monopoly law enforcement.
(3) Stimulate innovation and creativity. Create an orderly, open and inclusive development environment for competition, reduce barriers to market entry, guide and encourage platform operators to devote more resources to technological innovation, quality improvement, service improvement and model innovation, prevent and stop the exclusion and restriction of competition, inhibit the platform’s economic innovation and development and vitality, and effectively stimulate innovation of the whole society. Create momentum and build new advantages and momentum for economic and social development.
(4) Safeguard the legitimate interests of all parties. The development of the platform involves multiple subjects. While protecting fair competition in the field of platform economy and giving full play to the platform economy to promote the optimization of resource allocation, technological progress and efficiency improvement, anti-monopoly supervision strives to safeguard the legitimate rights and interests of operators, consumers, practitioners and other subjects on the platform, strengthen the overall coordination of anti-monopoly law enforcement and industry supervision, so that the whole society Share the technological progress and economic development achievements of the platform, and realize the overall ecological harmonious symbiosis and healthy development of the platform economy.
Article 4 Definition of relevant markets The business types of the platform economy are complex and the competition dynamics are changeable. Defining the relevant commodity markets in the field of platform economy and relevant regional markets need to follow the general principles defined in the Antimonopoly Law and the Guidelines of the Antimonopoly Committee of the State Council on the Definition of Relevant Markets. At the same time, it is necessary to consider the characteristics of the platform economy and combine with individual cases. Body analysis.
(1) Relevant commodity markets The basic method of defining relevant commodity markets in the field of platform economy is alternative analysis. When defining relevant commodity markets in individual cases, demand substitution analysis can be carried out based on platform functions, business models, application scenarios, user groups, multilateral markets, offline transactions and other factors; when the competitive constraints caused by supply substitution on operator behavior are similar to demand substitution, it can be based on market entry, technical barriers, Network effect, lock-in effect, transfer cost, cross-border competition and other factors consider supply substitution analysis. Specifically, the relevant commodity market can be defined according to the commodities on the side of the platform; multiple relevant commodity markets can also be defined separately according to the multilateral commodities involved in the platform, and the interrelationships and influences between the relevant commodity markets can be considered. When the cross-platform network effect existing in the platform can impose sufficient competitive constraints on platform operators, the relevant commodity market can be defined according to the platform as a whole.
(2) Relevant regional markets The definition of relevant geographical markets in the field of platform economy also adopts demand substitution and supply substitution analysis. When defining the relevant regional market in a case, it can comprehensively evaluate and consider the actual area where most users choose the goods, the user’s language preferences and consumption habits, the provisions of relevant laws and regulations, the degree of competition constraints in different regions, online and offline integration and other factors.According to the characteristics of the platform, the relevant regional market is usually defined as the Chinese market or a specific regional market, and can also be defined as a global market according to the case-by-case basis.
(3) The role of relevant market definitions in various monopoly cases Adhere to the principle of case analysis, different types of monopoly cases have different actual needs for relevant market definitions.Investigating monopolistic agreements in the economic field of platforms, cases of abuse of market dominance, and carrying out centralized anti-monopoly reviews by operators usually need to define relevant markets.
Chapter II Monopoly Agreement
The Antimonopoly Law prohibits operators from reaching and implementing monopoly agreements. Chapter II of the Anti-monopoly Law and the Interim Provisions on Monopoly Prohibition Agreement shall apply to the determination of monopolistic agreements in the field of platform economy. Monopoly agreements explicitly listed in Articles 13 and 14 of the Antimonopoly Law shall be prohibited in accordance with the law; monopolistic agreements that meet the conditions stipulated in Article 15 of the Antimonopoly Law shall be exempted in accordance with the law.When determining whether the relevant act constitutes a monopoly agreement in accordance with Article 13 (6) and Article 14 (3) of the Antimonopoly Law, the competition situation of the relevant market of the platform, the market strength of the platform operator and the platform operator, the degree of obstacles to other operators entering the relevant market, and the impact on innovation may be taken into account. and other factors.
Article 5 Form of Monopoly Agreement Monopoly agreements in the field of platform economy refer to agreements, decisions or other collaborative behaviors of operators that exclude or restrict competition. Agreements and decisions can be written, oral, etc. Other collaborative behavior refers to the fact that although the operator has not clearly concluded an agreement or decision, but there is essentially a coordinated behavior through data, algorithms, platform rules or other means, except for parallel behaviors such as price follow-up made by the relevant operator based on independent expression of will.
Article 6 Horizontal Monopoly Agreement Operators in the field of platform economy with competitive relations may reach horizontal monopoly agreements such as fixed prices, market segmentation, restriction of production (sales), restriction of new technologies (products), and joint resistance to transactions by:
(1) Use the platform to collect and exchange sensitive information such as price, sales volume, cost, customer, etc.;
(2) Use technical means to communicate with the will;
(3) Use data, algorithms, platform rules, etc. to achieve coordinated behavior;
(4) Other ways that help achieve synergy.The prices mentioned in this guide include but are not limited to commodity prices and service fees such as commissions, handling fees, membership fees, promotion fees, etc. charged by operators.
Article 7 Vertical Monopoly Agreement Operators and counterparts in the platform economy may reach vertical monopoly agreements such as fixed resale prices and limited minimum resale prices in the following ways:
(1) Automatic price setting by technical means;
(2) Unify prices by using platform rules;
(3) Use data and algorithms to directly or indirectly limit prices;
(4) Use technical means, platform rules, data and algorithms to limit other trading conditions and exclude and restrict market competition.
The behavior of platform operators requiring platform operators to provide them with transaction conditions equal to or better than other competitive platforms in terms of commodity prices, quantities, etc. may constitute a monopoly agreement or an abuse of market dominance.
Analyzing whether the above-mentioned acts constitute a vertical monopoly agreement stipulated in Article 14 (3) of the Antimonopoly Law, factors such as the market power of the platform operator, the competition situation of the relevant market, the degree of obstacles to other operators entering the relevant market, the impact on the interests of consumers and innovation can be comprehensively considered.
Article 8 Axial spoke agreement The platform operator with a competitive relationship may reach an axis-spoke agreement with the effect of a horizontal monopoly agreement with the help of the vertical relationship with the platform operator, or organized and coordinated by the platform operator. To analyze whether the agreement is a monopoly agreement regulated by Articles 13 and 14 of the Antimonopoly Law, it can be considered whether the operators on the platform with competitive relationship use technical means, platform rules, data and algorithms to reach and implement a monopoly agreement to exclude and restrict relevant market competition.
Article 9 Identification of collaborative behavior To determine the collaborative behavior in the field of platform economy, the fact that there is collaborative behavior can be judged through direct evidence. If direct evidence is difficult to obtain, according to the provisions of Article 6 of the Interim Provisions on Monopoly Prohibition Agreement, according to logical and consistent indirect evidence, the operator’s knowledge of relevant information can be determined and whether there is collaborative behavior between the operators. The operator can provide evidence to the contrary to prove that there is no synergy.
Article 10 The leniency systemAnti-monopoly law enforcement agencies encourage operators in the platform economy field who participate in horizontal monopoly agreements to take the initiative to report and provide important evidence about horizontal monopoly agreements, while stopping suspected illegal acts and cooperating with investigations. For operators who meet the conditions for leniency and application, the anti-monopoly law enforcement agency may mitigate or exempt the punishment.The Interim Provisions on Monopoly Prohibition Agreements and the Guidelines for the Application of the leniency System in Horizontal Monopoly Agreement Cases of the Antimonopoly Committee of the State Council shall apply to the specific standards and procedures for operators to apply for leniency.
Chapter III Abuse of Market Dominance
The Antimonopoly Law prohibits operators with a dominant market position from engaging in abuse of market dominance. Chapter III of the Antimonopoly Law and the Interim Provisions on the Prohibition of Abuse of Market Dominance shall apply to the determination of abuse of market dominance in the field of platform economy. Usually, first define the relevant market, analyze whether the operator has a dominant position in the relevant market, and then specifically analyze whether it constitutes an abuse of market dominance according to the case.
Article 11 Determination of Market DominanceThe anti-monopoly law enforcement agencies shall determine or presumption that the operator has a dominant market position in accordance with the provisions of Articles 18 and 19 of the Antimonopoly Law. Combined with the characteristics of the platform economy, the following factors can be specifically considered:
(1) The market share of the operator and the relevant market competition situation.To determine the market share of operators in the platform economy, you can consider the transaction amount, transaction quantity, sales volume, number of active users, clicks, usage time or other indicators in the relevant market, and consider the duration of the market share.When analyzing the relevant market competition situation, we can consider the development status of the relevant platform market, the number and market share of existing competitors, the characteristics of platform competition, the degree of platform differences, economies of scale, the situation of potential competitors, innovation and technological changes, etc.
(2) The ability of the operator to control the market. You can consider the operator’s ability to control the upstream and downstream markets or other affiliated markets, hinder or affect the ability of other operators to enter the relevant markets, the business model of the relevant platform, network effect, and the ability to influence or determine prices, traffic or other transaction conditions.
(3) Financial and technical conditions of the operator. It may consider the operator’s investor’s investor situation, asset size, capital source, profitability, financing ability, technological innovation and application ability, intellectual property rights owned, ability to master and process relevant data, and the extent to which the financial and technological conditions can promote the expansion or consolidation and maintenance of the operator’s business. Market position, etc.
(4) The degree of dependence of other operators on the transaction of the operator.You can consider the transaction relationship between other operators and the operator, transaction volume, transaction duration, lock-in effect, user stickiness, and the possibility of other operators switching to other platforms and conversion costs.
(5) The difficulty for other operators to enter the relevant market. Market access, platform scale effect, capital investment scale, technical barriers, user plephicility, user conversion cost, difficulty in data acquisition, user habits, etc. can be considered.
(6) Other factors. Other factors that determine the operator has a dominant market position based on the characteristics of the platform economy can be considered.
Article 12 Unfair price behavior Operators in the field of platform economy with a dominant market position may abuse their dominant position in the market to sell goods at unfairly high prices or buy goods at unfairly low prices. The following factors can be considered when analyzing whether it constitutes unfair price behavior:
(1) Whether the price is significantly higher than or significantly lower than the price of the same kind of goods or comparable commodities under the same or similar market conditions;
(2) Whether the price is significantly higher than or significantly lower than the price of the same commodity or comparable commodity under other conditions of the platform’s economic field operator;
(3) Under the condition that the cost is basically stable, whether the operator in the economic field of the platform has increased the sales price or reduced the purchase price beyond the normal range;
(4) Whether the price increase of the trader of the platform’s economic field is significantly higher than the cost increase, or whether the price reduction of purchased goods is significantly lower than the cost reduction range.When determining that the market conditions are the same or similar, factors such as platform type, business model, transaction link, cost structure, transaction specific situation, etc. can generally be considered.
Article 13 Sales below cost Operators in the field of platform economy with market dominance may abuse their dominant position in the market and sell goods at prices lower than costs without justifiable reasons, and exclude and restrict market competition.Analyze whether it constitutes lower-cost sales, and generally focus on whether operators in the platform economy field crowd out other operators with competitive relationships at lower-cost prices, and whether it is possible to raise prices to obtain improper benefits and harm fair competition in the market and the legitimate rights and interests of consumers after crowding out of other operators out of the market. Wait for the situation.In calculating costs, it is generally necessary to take into account the cost linkages between the relevant markets involved in the platform in multilateral markets.Operators in the field of platform economy may have the following legitimate reasons for selling below cost:
(1) Develop other businesses within the platform within a reasonable period of time;
(2) In order to promote the entry of new commodities into the market within a reasonable period of time;
(3) In order to attract new users within a reasonable period of time;
(4) Carry out promotional activities within a reasonable period of time;
(5) Other reasons that can justify the act.
Article 14 Rejection of Transactions Operators in the platform economy with a dominant market may abuse their dominant position in the market, refuse to trade with the counterparty without justifiable reasons, and exclude and restrict market competition. When analyzing whether it constitutes a refusal to deal, the following factors can be considered:
(1) Stop, delay or interrupt existing transactions with counterparts;
(2) Refuse to launch a new transaction with the counterparty of the transaction;
(III) Substantively reduce the number of existing transactions with the counterparty;
(4) Set unreasonable restrictions and obstacles in platform rules, algorithms, technology, traffic allocation, etc., making it difficult for the counterparty to carry out transactions;
(5) The operator who controls the necessary facilities in the economic field of the platform refuses to trade with the counterparty of the transaction on reasonable terms.To determine whether the relevant platform constitutes a necessary facility, it is generally necessary to comprehensively consider the data possession of the platform, the substitutionability of other platforms, the existence of potential available platforms, the feasibility of developing competitive platforms, the dependence of the transaction counterpart on the platform, and the possible impact of the open platform on the platform operator, etc. Factors.
Operators in the field of platform economy may have the following legitimate reasons for refusing to trade:
(1) Unable to conduct transactions due to objective reasons such as force majeure;
(2) Affecting the safety of the transaction due to the counterparty of the transaction;
(3) Trading with the counterparty of the transaction will unduly detract from the interests of operators in the field of platform economy;
(4) The counterparty of the transaction clearly stated or actually did not abide by the fair, reasonable and non-discriminatory platform rules;
(5) Other reasons that can justify the act.
Article 15 Limited transactions Operators in the platform economy field with a dominant position in the market may abuse their dominant position in the market, restrict transactions against the counterparty without justifiable reasons, and exclude and restrict market competition. When analyzing whether it constitutes a limited transaction behavior, the following factors can be considered:
(1) Require the operators of the platform to choose between competitive platforms, or limit other acts of exclusive transactions with the counterparty;
(2) The counterparty of the limited transaction can only trade with its designated operator, or through its designated channels and other limited means;
(3) The counterparty of the restricted transaction shall not conduct transactions with specific operators.The above restrictions may be achieved by written agreement, or by telephone, verbal agreement with the counterparty of the transaction, or by actual restrictions or obstacles in platform rules, data, algorithms, technology, etc.When analyzing whether it constitutes a restricted transaction, the following two situations can be considered: First, the restrictions imposed by platform operators through punitive measures such as blocking stores, search rights reduction, traffic restrictions, technical obstacles, deposit deduction, etc., can generally be regarded as limited delivery due to direct damage to market competition and consumer interests. Easy to act. Second, the restrictions imposed by platform operators through incentives such as subsidies, discounts, preferences, and flow resource support may have a certain positive effect on the interests of operators, consumers and the overall welfare of society on the platform, but if there is evidence to have obvious exclusion and restriction impact on market competition, it may also be recognized as structure. Limited transaction behavior.Operators in the field of platform economy may have the following legitimate reasons for restricting transactions:
(1) It is necessary to protect the interests of the counterparty and consumers in the transaction;
(2) It is necessary to protect intellectual property rights, trade secrets or data security;
(III) It is necessary to protect specific resource inputs for transactions;
(4) NECESSARY TO MAINTAIN A REASONABLE BUSINESS MODEL;
(5) Other reasons that can justify the act.
Article 16 tying or attaching unreasonable transaction conditions Operators in the field of platform economy with market dominance may abuse their dominant position in the market, carry out tying without justifiable reasons or attach unreasonable trading conditions, and exclude and restrict market competition. When analyzing whether it constitutes a tying or attaching unreasonable trading conditions, the following factors can be considered:
(1) Bundling and selling different goods by using format terms, pop-up windows, necessary steps for operation and other ways that the counterparty cannot choose, change or refuse;
(2) Force the counterparty to accept other commodities by means of punitive measures such as search and reduction, traffic restrictions, and technical obstacles;
(3) Additional unreasonable restrictions on transaction conditions and methods, service delivery methods, payment methods and means, after-sales guarantee, etc.;
(4) Charge unreasonable fees in addition to the transaction price;
(5) Compulsory collection of unnecessary user information or attachment of transaction conditions, transaction processes and service items unrelated to the subject matter of the transaction.
Operators in the field of platform economy may have the following legitimate reasons:
(1) Comply with legitimate industry practices and trading habits;
(2) It is necessary to protect the interests of the counterparty and consumers;
(3) It is necessary to improve the use value or efficiency of commodities;
(4) Other reasons that can prove the legitimacy of the act.
Article 17 Differential treatment Operators in the field of platform economy with market dominance may abuse their dominant position in the market, impose differential treatment on counterparts with the same trading conditions without justifiable reasons, and exclude and restrict market competition. The following factors can be considered when analyzing whether it constitutes differential treatment:
(1) Based on big data and algorithms, implement different transaction prices or other transaction conditions according to the ability to pay, consumption preferences, usage habits, etc. of the counterparty;
(2) Implement differentiation standards, rules and algorithms;
(3) Implement different payment terms and transaction methods.The same conditions mean that there is no substantial difference between the counterparty of the transaction in terms of transaction safety, transaction cost, credit status, transaction links, transaction duration, etc. Differences in the privacy information, transaction history, individual preferences, consumption habits and other aspects of the counterparty of the transaction obtained by the platform in the transaction do not affect the same conditions of the counterparty of the transaction.
Operators in the field of platform economy may have the following legitimate reasons for implementing differential treatment:
(1) Implement different trading conditions according to the actual needs of the counterparty and in accordance with legitimate trading habits and industry practices;
(II) Preferential activities carried out within a reasonable period of time for new users;
(3) Random transactions based on fair, reasonable and non-discriminatory rules of the platform;
(4) Other reasons that can prove the legitimacy of the act.
Chapter IV Concentration of Operators
The Antimonopoly Law prohibits operators from committing concentrations that have or may have the effect of excluding or restricting competition. In accordance with the Anti-monopoly Law, the Provisions of the State Council on the Standards for the Centralized Declaration of Operators and the Interim Provisions on the Centralized Examination of Operators, the anti-monopoly law enforcement agencies of the State Council conduct centralized examination of operators in the field of platform economy, and conduct centralized investigation and handling of illegal operators.
Article 18 Declaration criteria In the field of platform economy, the turnover of operators includes their income from the sale of goods and services. According to industry practices, charging methods, business models, the role of platform operators, etc., the calculation of turnover may be different. For platform operators who only provide information matching, commissions and other service fees, the turnover can be calculated according to the service fees charged by the platform and other income of the platform; if the platform operators specifically participate in the market competition on the side of the platform or play a leading role, the transaction amount involved in the platform can also be calculated.If the concentration of a business operator meets the declaration standards stipulated by the State Council, the business operator shall declare to the anti-monopoly law enforcement agency of the State Council in advance, and those who fail to declare shall not be centralized. The concentration of operators involving the agreement control structure belongs to the scope of the centralized antitrust review of operators.
Article 19 The anti-monopoly law enforcement agencies under the State Council take the initiative to investigate According to Article 4 of the Provisions of the State Council on the Standards for the Centralized Declaration of Operators, if the concentration of business operators does not meet the declaration standards, but the facts and evidence collected in accordance with the prescribed procedures and evidence that the concentration of the business operators has or may have the effect of excluding or restricting competition, the anti-monopoly law enforcement agency of the State Council shall investigate in accordance with the law.Operators may take the initiative to report to the anti-monopoly law enforcement agency under the State Council on the business operator who does not meet the declaration standards.The anti-monopoly law enforcement agency of the State Council pays great attention to the concentration of operators participating in the platform economy fields such as start-ups or emerging platforms, and operators who participate in concentration due to the adoption of free or low-cost models, resulting in low turnover, high market concentration in relevant markets, and a small number of competitors. If the declaration standard is not met but has or may have the effect of excluding or restricting competition, the anti-monopoly law enforcement agency under the State Council will investigate and deal with it according to law.
Article 20 Factors considered The anti-monopoly law enforcement agency of the State Council will evaluate the competitive impact of the concentration of operators in the economic field of the platform in accordance with the relevant provisions of Article 27 of the Anti-monopoly Law and Chapter III of the Interim Provisions on the Centralized Examination of Operators. Combined with the characteristics of the platform economy, the following factors can be specifically considered:
(1) The market share of the operator in the relevant market. In addition to the turnover as the index, you can also consider the proportion of transaction amount, transaction number, number of active users, clicks, usage time or other indicators in the relevant market, and comprehensively evaluate the market share over a longer period of time as appropriate to judge its dynamic change trend.
(2) The operator’s control over the market. You can consider whether the operator has exclusive rights over key and scarce resources and the duration of the exclusive rights, the stickiness and ple栖ness of platform users, the operator’s ability to master and process data, the ability to control the data interface, the ability to penetrate or expand into other markets, and the profitability and profitability of the operator. Level, frequency and speed of technological innovation, life cycle of goods, whether or possible disruptive innovation, etc.
(3) Concentration of relevant markets. You can consider the development status of the relevant platform market, the number of existing competitors and market share, etc.
(4) The impact of the concentration of operators on market entry. Market access, the difficulty of operators obtaining necessary resources and necessary facilities such as technology, intellectual property rights, data, channels, users, etc., the scale of capital investment required to enter the relevant markets, the conversion costs of users in fees, data migration, negotiation, learning, search and other aspects, and the possibility of entry. , timeliness and adequacy.
(5) The impact of operator concentration on technological progress. You can consider the competition of competitors in the existing market in innovation such as technology and business models, the impact on the innovation motivation and ability of operators, and whether the acquisition of start-ups and emerging platforms will affect innovation.
(6) The impact of the concentration of business operators on consumers. After concentration, the ability and motivation of operators to improve commodity prices, reduce commodity quality, reduce commodity diversity, damage consumers’ ability and scope, treat different consumer groups differently, and improperly use consumer data to harm the interests of consumers.
(7) Other factors that the anti-monopoly law enforcement agencies under the State Council think should be considered to affect market competition. Including the impact on other operators and the development of the national economy.The concentration of operators involved in bilateral or multilateral platforms may require a comprehensive consideration of the bilateral or multilateral operations of the platform, as well as other operations carried out by operators, and an assessment of the externalities of direct and indirect networks.
Article 21 Relief measures For the concentration of operators with or likely to have the effect of excluding or restricting competition, the anti-monopoly law enforcement agency under the State Council shall make a decision in accordance with the provisions of Article 28 of the Antimonopoly Law. For the concentration of non-prohibited operators, the anti-monopoly law enforcement agencies under the State Council may decide to attach the following types of restrictive conditions:
(1) Structural conditions such as divestiture of tangible assets, intangible assets such as intellectual property rights, technology and data, or relevant rights and interests;
(2) Behavioral conditions such as opening up networks, data or platforms, licensing key technologies, terminating exclusive protocols, modifying platform rules or algorithms, promising compatibility or not reducing the level of interoperability;
(3) Comprehensive conditions combining structural conditions with behavioral conditions.
Chapter V Abuse of Administrative Power to Exclude and Restrict Competition
The Antimonopoly Law prohibits administrative organs and organizations authorized by laws and regulations to abuse administrative power to exclude and restrict competition. For the abuse of administrative power in the field of platform economy to exclude and restrict competition, anti-monopoly law enforcement agencies shall investigate in accordance with the law and put forward suggestions for handling.
Article 22 Abuse of administrative power to exclude or restrict the performance of competitive behavior Administrative organs and organizations authorized by laws and regulations to have the function of managing public affairs engage in the following acts, excluding and restricting market competition in the field of platform economy, which may constitute abuse of administrative power to exclude and restrict competition
:(1) Limit or disguisedly restrict the operation, purchase and use of commodities provided by operators in the field of platform economy designated by units or individuals, or commodities related to platform services provided by other operators;
(2) Set discriminatory standards and implement discriminatory policies for operators in the field of platform economy in other places, and obstruct or restrict operators in the economic field of other places from entering the local market by means of administrative licenses and filings specifically for operators in the field of platform economy, or through software, Internet settings, etc., to hinder or restrict operators in the economic fields of non-local platforms from entering the local market, and hinder Free circulation of goods between regions;
(3) Exclude or restrict operators in the economic field of non-local platforms from participating in local bidding and procurement activities by setting discriminatory qualification requirements, bid evaluation standards or not publishing information according to law;
(4) Discriminatory treatment against operators in the economic field of non-local platforms, and exclude, restrict or force non-local operators to invest locally or establish branches;
(5) Force or force operators in the field of platform economy to engage in monopolistic acts stipulated in the Antimonopoly Law in disguise;
(6) Administrative organs formulate and promulgate market access, industrial development, investment attraction, bidding and bidding, government procurement, business codes of conduct, qualification standards and other market entities involving the platform economy that contain provisions, methods, decisions, announcements, notices, opinions, minutes of meetings, etc. that exclude and restrict competition. Regulations, normative documents and other policy documents for economic activities, as well as specific policy measures in the form of “one thing, one discussion”.
Article 23 Fair Competition Review Organizations authorized by administrative organs and laws and regulations with the function of managing public affairs shall conduct fair competition review in accordance with the relevant provisions of the State when formulating rules, normative documents, other policy documents and specific policies and measures in the form of “one matter, one discussion” involving the economic activities of market subjects in the field of platform economy.
Chapter VI Supplementary Provisions
Article 24 Interpretation of the Guide
This guide shall be interpreted by the Antimonopoly Committee of the State Council and shall come into force as of the date of promulgation.
Prohibition of unfair competition on the Internet
(Public draft for comments)
Chapter 1 General
Article 1 These Provisions are formulated in accordance with the Anti-Unfair Competition Law of the People’s Republic of China (hereinafter referred to as the Anti-Unfair Competition Law) the Electronic Commerce Law of the People’s Republic of China, the Administrative Punishment Law of the People’s Republic of China (hereinafter referred to as the Administrative Punishment Law) and other laws in order to stop and prevent unfair competition on the Internet, encourage and support innovation, maintain a fair market order, protect the legitimate rights and interests of operators and consumers, and promote the sustained and healthy development of digital economic norms.
Article 2 When an operator engages in production and business activities through an information network such as the Internet (hereinafter referred to as a network), he shall abide by the principles of voluntary, equality, fairness and good faith, abide by laws and regulations and these Provisions, and abide by business ethics.
An operator may not commit or help to carry out unfair competition on the network, disturb the order of market competition, affect fair trading in the market, or directly or indirectly harm the legitimate rights and interests of other operators or consumers.
Article 3 The State Administration of Market Supervision and Administration shall be responsible for organizing and guiding the anti-unfair competition work of the national network and investigating and prosecuting major cases of unfair competition on the network.
The departments (hereinafter referred to as market supervision departments) of the people’s governments at or above the county level that perform the duties of market supervision and management shall investigate and punish the unfair competition on the Internet in accordance with the law.
Article 4 Member units of the coordination mechanism for anti-unfair competition work of the people’s governments at or above the county level shall strengthen coordination and cooperation, jointly study and solve major problems in network competition in their respective regions, and jointly carry out comprehensive management of unfair competition in the network.
Article 5 Encourage, support and protect all organizations and individuals to exercise social supervision over the improper competition on the Internet. Any unit or individual shall have the right to report any act suspected of unfair competition on the Internet to the market supervision department, which shall deal with the report in a timely manner in accordance with the law after receiving the report.
Article 6 If a platform operator provides guidance and norms on the competitive behavior of the operators within the platform and discovers that the operators within the platform have violated these Provisions, they shall take the necessary measures in accordance with the law, keep the relevant disposal information for not less than three years and accept supervision and inspection in accordance with the law.
If, after taking the necessary disposal measures, the operators within the platform continue to commit illegal acts and cause harmful consequences, the platform operators shall promptly report the illegal clues to the competent market regulatory authorities.
General norms of network competitive behavior
Article 7 In the course of production and sales activities, an operator may not use the network to carry out the following confusing acts, which may lead to the mistaken belief that it is another person’s commodity or that there is a specific connection with another person:
(1) unauthorized use of the same or similar logo of the main part of the domain name, website name, web page, etc., which has a certain influence on others;
(2) unauthorized use of the same or similar logos as the page design, name, icon, shape, etc. of applications, shops, self-media, game interfaces, etc. that have a certain impact on others;
(3) Without authorization, the names of other people’s goods, enterprise names (including abbreviations, font sizes, etc.), names of social organizations (including abbreviations, etc.), names (including pen names, art names, translation names) and other identifications as search keywords.
(4) Other confusing acts carried out using the Internet that are sufficient to lead to the mistaken belief that they are other people’s goods or have a specific connection with others.
The operator providing network services shall not assist other operators in carrying out the confusion stipulated in the preceding paragraph.
Article 8 An operator may not deceive or mislead consumers or the relevant public by making false or misleading commercial propaganda about the performance, function, quality, honor and qualification of the operator himself or his commodities
(1) display, presentation, explanation, explanation, promotion or text labeling through websites, self-media and other network means;
(2) to implement commercial marketing activities through live marketing, topic marketing, platform recommendations, online copy, etc.;
(iii) Other ways of network publicity.
The operator shall not assist other operators in carrying out the business propaganda acts which are false or misleading in the preceding paragraph.
Article 9 An operator may not deceive or mislead consumers or the relevant public by making false or misleading commercial propaganda about the sales status, transaction information, business data, user evaluation, etc. of the operator himself or his products in the following ways:
- False transactions or organization of false transactions;
- False ranking or organization of false ranking;
(3) fictitious transaction volume, turnover, appointment volume and other data information related to the operation;
(4) Fictitious user evaluation, collection, likes, votes, attention, subscriptions, forwarding and other traffic data;
(5) using misleading displays, etc., to conceal poor reviews, or to pre-review, poorly rated, or not significantly distinguish between the evaluation of different goods or services;
(6) Fictitious interactive data such as clicks, attention, reading, listening, viewing and playback;
(7) false marketing by falsely claiming to be in stock, making up a reservation, and snapping up a fake purchase;
(8) To induce users to make designated evaluations, likes, forwards, targeted voting and other interactive behavior by means of cashback, red envelopes, card vouchers, etc.;
(9) Other false or misleading commercial propaganda.
The operator shall not assist other operators in carrying out the business propaganda acts which are false or misleading in the preceding paragraph.
Article 10 An operator may not use property or other means to bribe the staff of a network platform, units or individuals that have an influence on online transactions in order to obtain trading opportunities or competitive advantages.
Article 11 An operator may not use the network to fabricate or disseminate false or misleading information, therefore, to damage the commercial reputation of competitors and the reputation of commodities.
The term “false information” in the preceding paragraph refers to information whose contents are untrue and inconsistent with the actual situation.
The term “misleading information” in the preceding paragraph refers to information that, although true, only states part of the facts and is prone to false associations.
The term “damage to the commercial reputation and commodity reputation of competitors” as mentioned in the preceding paragraph refers to the significant reduction or decrease in network traffic, commercial advertising revenue, financing capacity, etc. of other operators, as well as damage to potential competitiveness such as trading opportunities, predictable business earnings, bargaining power and brand value.
Article 12 An operator may not perform the following acts to damage the commercial reputation of a competitor or the reputation of a commodity:
(1) organizing and instructing others to make malicious evaluations of competitors’ goods in the name of consumers;
(2) using or organizing or instructing others to maliciously disseminate false or misleading information through the Internet;
(3) using the Network to make false or misleading risk tips, customer letters, warning letters, lawyer letters or report letters to competitors’ goods;
(4) Other acts of fabricating or disseminating false or misleading information that damage the commercial reputation of competitors and the reputation of commodities.
Organizations or individuals such as the media, providers or users of follow-up comment services, and network water forces shall not assist other operators in carrying out the acts mentioned in the preceding paragraph.
Chapter III Prohibits the use of technical means to engage in unfair competition such as interference
Article 13 An operator may not use data, algorithms and other technical means to carry out traffic hijacking, interference, malicious incompatibilities, etc. by influencing user choice or other means, so as to hinder or disrupt the normal operation of network products or services legally provided by other operators.
Article 14 Without the consent of other operators, the operators may not, in the network products or services legally provided by other operators, carry out the following traffic hijacking acts, such as inserting links or forcing target jumps:
(1) Insert jump links or embed links to their own products or services in network products or services legally provided by other operators;
(2) using keyword associations and other functions to set up links to their own products or services, to deceive or mislead users to click;
(iii) Other acts of traffic hijacking by technical means.
Article 15 An operator may not use technical means to carry out the following acts of interfering with network products or services legally provided by other operators:
(1) misleading, deceiving or forcing users to modify, shut down, uninstall or abandon the use of network products or services legally provided by other operators;
(2) downloading, installing or running the application against the will of the user, harming the legitimate rights and interests of consumers or affecting the normal operation of the equipment, functions or other programs legally provided by other operators;
(3) Not providing uninstall functions or erecting obstacles to application uninstall for applications that are not basic functions, harming the legitimate rights and interests of consumers or affecting the normal operation of equipment, functions or other programs legally provided by other operators;
(4) To block, intercept, modify, shut down or uninstall network products or services legally provided by other operators without valid reasons, and to prevent them from downloading, installing, running, upgrading, forwarding, transmitting, etc.;
(5) Adjust the natural sorting position of other operators’ network products or services in search results, and implement malicious lock-up.
(6) Other acts that obstruct or interfere with the network products or services legally provided by other operators.
Article 16 An operator may not use technical means to maliciously implement incompatibility with network products or services legally provided by other operators.
To determine whether the operator maliciously implements incompatibility with the network products or services legally provided by other operators, the following factors shall be taken into account:
(1) the subjective intent of incompatible conduct;
(2) the scope of objects for the implementation of incompatible acts;
(3) The effect of incompatible behavior on the order of market competition;
(4) The effect of incompatible behavior on the normal operation of network products or services legally provided by other operators;
(5) The impact of incompatible behavior on the legitimate rights and interests of consumers and social welfare;
(6) whether the incompatible behavior conforms to the principles of good faith, business ethics, specific industry practices, practice norms, self-regulation conventions, etc.;
(7) Whether the incompatible act is justified.
Chapter IV Prohibits the Use of Technology to Engage in Unfair Competition on Other Networks
Article 17 An operator may not, directly, organize or through a third party, engage in high-frequency transactions with competitors or give favorable favors in a short period of time, trigger the anti-brushing single-punishment mechanism of the platform and reduce the trading opportunities of such competitors.
Article 18 An operator may not intercept or block the contents and pages of a particular information service provider, except for information that frequently pops up that interferes with the user, and floating, windows, etc. information that does not provide a way to close.
Article 19 An operator may not use technical means to reduce trading opportunities between other operators by means of influencing the choice of users, restricting the flow, shielding, and taking goods off the shelves, and to carry out “two-choice-one” acts, obstructing or disrupting the normal operation of network products or services legally provided by other operators and disrupting the fair competition order in the market.
The operator shall not use technical means to influence the business choices of other operators by restricting the object of transaction, restricting the sales area or time, restricting participation in promotion, etc., carry out the “two-choice-one” behavior, hinder or destroy the normal operation of network products or services provided by the dependent transaction counterparty law, and disturb the fair trading order of the market.
Article 20 An operator may not use technical means to illegally seize or use the data of other operators, and constitute a substantial substitute for the main content or part of the network products or services legally provided by other operators, or unreasonablely increase the operating costs of other operators, detract from the security of user data of other operators, and impede or disrupt the normal operation of network products or services legally provided by other operators.
Article 21 An operator may not use data, algorithms and other technical means to provide different transaction information to the counterparty of the transaction under the same trading conditions by collecting and analyzing the transaction information of the counterparty, browsing the content and number of times, and the brand and value of the terminal equipment used in the transaction, and infringe upon the counterparty’s right to know, to choose and to trade fairly, etc., and to disturb the fair trading order in the market.
Transaction information includes transaction history, willingness to pay, spending habits, individual preferences, ability to pay, dependence, credit status, etc.
Article 22 An operator may not use technical means to carry out other acts that impede or disrupt the normal operation of network products or services legally provided by other operators.
To determine whether this causes obstruction or disruption to the normal operation of network products or services legally provided by other operators, the following factors may be taken into account:
(1) whether it causes other operators to legally provide network products or services can not be used normally;
(2) whether it causes the network products or services legally provided by other operators to be downloaded, installed or uninstalled normally;
(3) whether it causes unreasonable increase in the cost of network products or services legally provided by other operators;
(4) whether it leads to an unreasonable reduction in the number of users or visits to network products or services legally provided by other operators;
(5) whether it causes an unreasonable decline in the consumer experience or an unreasonable loss of other benefits;
(6) the number and duration of the act;
(7) the geographical scope and time range of the effect of the act;
(viii) Other factors.
Chapter V Supervision and Inspection
Article 23 In general, cases of unfair competition on the Internet shall be governed in accordance with the Provisions on Administrative Punishment Procedures for Market Supervision and Administration.
If the website builder or manager’s place of residence, the operator’s actual place of operation, or the market supervision department where the illegal results occur first discovers the illegal clue or receives the relevant report, it may also exercise jurisdiction.
Article 24 In the course of investigating and handling cases of unfair competition on the Internet, the operators, interested parties and other relevant units and individuals under investigation shall truthfully provide relevant information or information, shall not forge or destroy the data and related information involved in the case, shall not obstruct the market regulatory department from performing its duties in accordance with the law, and shall not refuse or obstruct the investigation.
Article 25 If an operator commits an act of unfair competition in violation of these Provisions, if the circumstances are serious or cause significant impact, he shall, after accepting the administrative punishment of the market supervision department, make a public commitment to the society through the Internet to make a letter of rectification and undertake to take measures to eliminate the consequences of the act.
Article 26 Market regulatory authorities may, in accordance with the needs of case handling, entrust third-party professional institutions to collect evidence and fix electronic evidence related to the case and audit financial data.
Article 27 For new and difficult cases, the market regulatory authority may appoint expert observers to assist in the investigation.
Expert observers may, on the basis of their own professional knowledge, business skills, practical experience, etc., give opinions on whether the competitive behavior of operators promotes innovation, improves efficiency, and protects the legitimate rights and interests of consumers.
Article 28 Expert observers shall meet the following conditions at the same time:
(1) having good moral character, fairness, honesty and trustworthiness;
(2) having a bachelor’s degree or above in law, economics, finance or computer science;
(3) At least 5 years of work experience in the field of Internet or unfair competition regulation.
Article 29 An expert observer shall avoid one of the following circumstances:
- Having served in the operator under investigation;
- Serving or part-time in the peer-to-peer competitors of the operator under investigation;
- Where there is evidence that expert observers are involved in assisting in the investigation of intellectual property risks such as the disclosure of trade secrets of the operator under investigation;
- There are other stakes that may lead to unfair findings.
Article 30 The market regulatory authority and its staff, third-party professional institutions, expert observers, etc. shall have the obligation to keep confidential the trade secrets known in the course of participating in the investigation.
Chapter 6 Legal Responsibility
Article 31 If an operator violates Article 7 of these Provisions, the market supervision department shall punish him in accordance with the provisions of Article 18 of the Anti-Unfair Competition Law.
Article 32 If an operator violates Articles 8 and 9 of these Provisions, the market supervision department shall punish him in accordance with the provisions of Article 20 of the Anti-Unfair Competition Law.
Article 33 If an operator violates Article 10 of these Provisions, the market supervision department shall punish him in accordance with the provisions of Article 19 of the Anti-Unfair Competition Law.
Article 34 If an operator violates Articles 11 and 12 of these Provisions, the market supervision department shall punish him in accordance with the provisions of Article 23 of the Anti-Unfair Competition Law.
Article 35 If an operator violates these Provisions Articles 13, 14, 16, 17, 18, 19, 20, 21 and 22, the market regulatory authority shall impose penalties in accordance with the provisions of Article 24 of the Anti-Unfair Competition Law.
Article 36 If an operator violates Article 24 of these Provisions, the market supervision department shall punish him in accordance with the provisions of Article 28 of the Anti-Unfair Competition Law.
Article 37 If an operator violates the provisions of Articles 6 and 25 of these Provisions, the laws and regulations shall provide for them in accordance with their provisions. If the laws and regulations do not provide for it, the market regulatory authorities shall, depending on the seriousness of the circumstances, give a warning or impose an administrative penalty of not more than three times the amount of illegal income, but not more than 30,000 yuan;
Article 38 Where an operator abuses its dominant position in the market and carries out online competition to exclude or restrict competition, it shall be dealt with in accordance with the Antimonopoly Law of the People’s Republic of China.
Article 39 If an operator violates these Provisions and has illegal income, he shall, in accordance with the provisions of Article 28 of the Administrative Penalty Law, confiscate it, except for those who should be refunded in accordance with the law.
Chapter VII By-laws
Article 40 These Provisions shall come into effect as of January 2021.
