Recently, China, the United States, and the European Union have all been stepping up their regulation and antitrust investigations against interne giants. The State Administration for Market Regulation (SAMR) of China has imposed penalties of RMB 500,000 for the acquisition of Yintai Commercial by Alibaba, the acquisition of New Classics Media by Tencent-backed China Literature, and the acquisition of China Post Smart Logistics Technology by Hive Box, each of which was not declared in accordance with the law. The penalties are symbolic and show that China's seriousness in regulating the disorderly expansion of Internet companies. Prior to this, the SAMR has been soliciting public opinion on the Anti-Monopoly Guidelines on the Sector of Platform Economies (the "Draft Guidelines"), which indicates a policy trend of shifting from "encouraging innovation" to "strengthening regulation" of internet companies. Following the suspension of Ant Group's IPO, China's regulatory rules for internet companies are being implemented. This is bound to have an impact on the digital economy and will lead to fundamental changes in the current digital market landscape under the BAT (Baidu, Alibaba, and Tencent) monopoly.
The involvement of internet giants such as Ant Group in the online lending business, and the recent promotion of various business models such as "community group buying" by e-commerce platforms, reflects the fact that China's large internet companies are constantly seeking to expand. However, this also simultaneously demonstrates that unfair competition based on their own advantages has an increasingly negative effect on a benign market. China's online economy is showing a trend of increasing market concentration, with more and more market resources being concentrated on top platforms, and more and more complaints and reports about platform monopoly issues, indicating that some competition risks and hidden dangers exist in the development of the online economy, according to the state anti-monopoly authority. The financial problems of internet business models such as apartment rental platforms and bike-sharing have also shown the negative effects of capital in this "flux economy".
In the current international environment, strengthening antitrust regulation of the internet giants is becoming a primary challenge for market regulators in major economies. The U.S. Congress, the Department of Justice, and other agencies are intensifying their antitrust investigations into the four internet giants, resulting an antitrust investigation report being released on October 6 by the U.S. House of Representatives antitrust subcommittee. The report concluded that tech giants, including Apple, Amazon, Google, and Facebook, had "monopoly power" in key business areas and had abused their dominant position in the market. The tech giants will also face lawsuits in the coming year, either independently or jointly, in various U.S. states. In Europe, countries across the EU have begun to penalize Amazon, Google, and Facebook for misconducts in their respective fields. The EU, for example, has accused Amazon of monopolistic practices, claiming that the company used big data and other means to collect personal information from users and make recommendations based on their preferences. All these allow Amazon to maintain its appeal to users and squeeze other competitors out of the market. Amazon could face fines of up to 10% of its global turnover if the EU finds it guilty of antitrust violations.
These enhanced regulatory measures aimed precisely at the "flux", or "traffics" owned by these internet giants. The "flux" is actually data of consumers or users; the established model of the internet companies is to rely on capital and technology to obtain a large amount of user data through various platforms, and then to use "flux" to obtain profits through financial or other sales means. In other words, internet giants profit from the cheap acquisition of user data assets, creating a new monopoly. Whether it is the imposition of a digital tax, or the strengthening of personal data protection, the intention is to raise the value of data and offset the "flux" advantage of the internet giants. In this respect, if antitrust is purely based on fair competition in the market, it may overlook the characteristics of the new economy.
In fact, some officials from the EU and China have mentioned the issue of data rights ownership, and that a large amount of personal data should not be used or transferred by internet giants without compensation, thereby fundamentally breaking the pursuit of "traffic" by internet companies and returning to the essence of technological innovation. In this regard, ANBOUND has mentioned that a public data ownership platform should be established, so that market players can have fair access and standardized use, thus avoiding the formation of "flux" monopoly. The authorities need to consider redefining those platforms based on the nature of the business. Once the ownership of data rights is clarified, it will have a significant effect on the "flux economy". This would be fatal for the current tech giants and would certainly revolutionize the digital economy.
For anti-monopoly, it is not merely about restricting some corporate behaviors, but also about guiding and regulating the role of capital to promote technological innovation and establish a benign market mechanism. As Xu Weihong, senior cooperative scholar of ANBOUND pointed out, capital is neutral and should not be subjected to moral judgment; instead it should be properly regulated, guided, and standardized by making full use of information technology, so as to achieve a dynamic balance between benign corporate development and social benefits. If there is no corresponding market regulation and taxation policies, the unregulated capital will inevitably curb the innovation ability of companies and undermine the order of market competition, and that is something that must be prevented.
Many countries in the world have now realized that internet companies can and do hinder market innovation and competition, hence the trend of anti-monopoly against internet giants is taking shape. China's internet giants, as well as tech giants with dominant global markets, will face increasingly stringent regulations. This will also have a profound impact on the entire digital market landscape. It can be said that in the digital economy, the era of brutal growth dominated by "flux" competition is coming to an end. As in the case of IBM, Cisco, and Microsoft, some of the tech giants will be tested for survival and transformation.
Final analysis conclusion:
China has begun imposing anti-monopoly penalties on internet institutions, indicating a global trend towards anti-monopoly against such companies is emerging. The core of the antitrust policy is the ownership and rational use of data "flux". This will have a fatal impact on the business models of the current tech giants, and will lead to new changes in the market landscape of the global digital economy.
