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Chinese regulators ramp up efforts to strengthen antitrust probe

China’s intensified antitrust drive has made a sweeping wave among online platform businesses. China’s top market regulator announced on Monday an anti-trust probe on the country’s largest online food delivery platform Meituan-Dianping over alleged market monopolistic acts, such as directing its merchants to “choose one (platform) out of two” – a practice prevents the merchants from selling their goods on multiple platforms.

Earlier this month, Meituan and 11 major platforms including Baidu, JD.com, ByteDance and Pinduoduo, published their law-abiding compliance operation commitments. Earlier this month, China’s anti-trust regulator had imposed a record fine bill of $2.8 billion on Alibaba Group Holding.

As China has recently sent an unmistakable signal that it intends to further tighten anti-trust law enforcement to ensure fair competition on the market, what other fields or companies may face similar probe in near future?

In fact, the reason why Meituan faced investigation is not only due to its “choosing one out of two” problem. The delivery giant has also received complaints over rising prices squeezing both merchants and delivering workers.

From Alibaba to Meituan, these are not totally isolated cases. Behind the irregularity and unhealthy development of the platform economy, there exists the general disharmony across the entire digital economy, which needs to be examined and rectified.

From online finance, delivery to car-hailing services, there is a wide range of illicit anticompetitive practices. While enjoying the benefits of China’s booming digital economy, many emerging internet-based companies have not fulfilled their social responsibility amid fast expansion. The government’s intensified antitrust campaign is now targeting such issues.

For many years, the basic logic of online giants’ success is to defeat competitors through expansion and raise levies after gaining market dominant positions. For instance, for companies like the Didi Chuxing that have sought market dominance in car hailing business, the regulators are also taking a closer look at their business dealings.

From the two sessions to the 14th Five-Year Plan, China has put more importance on developing the platforms, vowing to build an ecological and harmonious digital economy in the country which help gain upper hand in competition with other major economies.

However, it should be noted that what the regulatory moves will bring is not imposing restriction or limits on the development of the digital industry, instead, fairer competition environment of the market will usher in a major growth opportunity.

China’s top leadership on Monday has encouraged private enterprises to develop boldly with confidence and expressed support for their development.

Chinese market regulators on April 13 emphasized that to ramp up oversight of illicit behaviors by online platform enterprises, does not mean that the attitude of the state to support and encourage healthy growth of the platform economy has changed.

Over the recent years the country’s online giants are encountering rising competition from traditional businesses. For the broad consumers, the disorderly expansion of platforms and their monopolistic practices have proved to be very harmful. Establishing a new platform-based economic order, centering on fair competition, innovative development, common security and share values, will help create a better and more sustainable platform-based strong economy.
Source: Global Times

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