ByteDance, Baidu and CTrip are committed to ensuring fair competition. Photo: Reuters More than 20 leading Chinese technology companies have publicly pledged to adhere to antitrust principles, after regulators asked them to pay attention to the record penalty for the “giant” e-commerce. Alibaba. In a series of separate statements published by the China Market Regulatory Authority on April 14-15, some of the country’s biggest tech brands – including ByteDance, Baidu and CTrip – pledged will “ensure fair competition”, “do not abuse a dominant market position” and “do not conduct unfair pricing practices”. The pledges come after regulators summoned 34 technology companies on April 13 and asked them to “rectify” any unfair non-competitive practices, and pay attention to in the case of Alibaba. Companies have one month for full reform, after conducting internal audits and adjusting practices that compromise fair competition. Ride-hailing service Didi, video streaming platforms Kuaishou and Bilibili, as well as e-commerce company JD.com were among the parties that have made a public commitment since that meeting. JD.com said it will not force “choose one of the two” behavior on its retailers – where merchants are required to work on only one platform, not on a competitor platform. . This is the policy that Alibaba used to apply. In its statement, Didi pledged that unless necessary for regular business operations, the company will not illegally collect or misuse customers’ personal information. Last weekend, Chinese regulators fined Alibaba up to $ 2.78 billion after a months-long investigation found the company abused its dominant position in the market. Alibaba and JD.com, along with games and messaging app giant Tencent, have greatly benefited from the increasingly technological lifestyles in China and the absence of major U.S. competitors. But as these platforms with hundreds of millions of regular users are growing, public opinion is increasingly concerned about the problem of user data that these companies collect over the long term. According to observers, China has put domestic technology companies on the target to limit the reach of private companies to the daily financial activities of its people. That move could curb their dominance.

Figure: Figure Worm Recently, the Huai’an Intermediate People’s Court of Jiangsu Province issued a judgment on Meituan’s unfair competition. This case is the first application of Article 12 of the “People’s Republic of China Anti-Unfair Competition Law” that came into effect on January 1, 2018. Infringement cases of unfair competition in the takeaway field. The civil judgment shows that Beijing Sankuai Technology Co., Ltd. (Meituan) will pay 352,000 yuan to Shanghai Lazas Information Technology Co., Ltd. (Hungry?). This is also the first time that the new anti-French Internet article has been applied to the food delivery area. Repeatedly fined This is the second time Meituan has lost a lawsuit in the food delivery field because it forced its merchants to choose one of the two. Before this year, Meituan was also punished many times. In February of this year, the Intermediate People’s Court of Jinhua City, Zhejiang Province ruled against Zhejiang Jinhua Meituan’s practice of requiring some merchants to enter into exclusive transactions with them. The judgment showed that the unfair competition conducted by Beijing Sankuai Technology Co., Ltd. Jinhua Branch harmed the legitimate rights and interests of Lazas Company (Ele.), and should bear civil liability and compensate Shanghai Lazas Information Technology Co., Ltd. 100 Ten thousand yuan economic loss. In June 2017, the Market Supervision Bureau of Jinhua City, Zhejiang Province imposed penalties on Meituan’s illegal activities such as restricting competition, and fined a total of 526,000 yuan. Because Meituan took advantage of its dominant position in the local area, it forced the merchants to sign a “commitment letter of cooperation” and required the signing of an exclusive agreement, otherwise it would increase the rate or even close the store. In May 2018, the Market Supervision Bureau of Qingjiangpu District, Huai’an City, Jiangsu Province raised rates, set a break, set unreasonable conditions, etc. for some merchants operating on Meituan and Ele.me food delivery platforms at the same time for Meituan Takeaway. The act of forcing merchants to remove Ele.me food delivery platform stores was determined to constitute an act of unfair competition, and Meituan was fined 70,000 yuan in accordance with the law. In March 2019, due to alleged misleading and deceit, forcing users to modify, close, and uninstall network products or services legally provided by other operators, the Market Supervision and Administration Bureau of Tongjiang County, Bazhong City, Sichuan Province forced merchants to choose Meituan Takeaway as a “second choice” 1. The party concerned shall be punished with a fine of up to 250,000 yuan and “ordered to stop illegal activities”. Are you hungry, “choose one of two” fined Not only Meituan, Ele.me was also punished for being forced to “choose one of two”. On April 7, Wenzhou Intermediate People’s Court ruled that Ele.me asked merchants to close Meituan’s takeaways and forced the merchants to sign an exclusive cooperation agreement with Ele.me’s platform. After being rejected by the merchants, they logged in to the merchant’s account and closed it on the Ele.me platform. Shop. The court held that the subjective maliciousness of Ele.me’s unfair competition behavior was obvious, which harmed the commercial interests of merchants, severely restricted consumers’ right to choose, and severely hindered and undermined the legally provided services by Meituan Waimai and other food delivery platform operators. The normal operation of the network service ordered Ele.me to compensate Meituan for the economic losses of the takeout. Strictly control unfair competition With the intensification of unfair competition behaviors such as “choose one out of two”, the supervision of relevant state departments has gradually tightened and improved. On November 10, 2020, on the eve of the e-commerce “Double Eleven” promotion, the State Administration for Market Regulation issued the “Anti-Monopoly Guidelines on the Platform Economy (Draft for Comment)” for the first time clearly defined the “choice of two” as Abuse of market dominance, constitute a restricted transaction behavior. On February 7 this year, the Anti-Monopoly Commission of the State Council formally issued and implemented the “Guidelines for Anti-Monopoly in the Platform Economy Field” to prevent and stop monopolistic activities in the platform economy, clarifying that “choosing one of the two” may constitute an abuse of market dominance to restrict transactions. . Not long ago, the State Administration of Market Supervision imposed an administrative penalty on Alibaba’s “choice of two” monopolistic behavior, ordering Alibaba Group to stop its illegal activities and imposing a fine of 4% of its domestic sales of 455.712 billion yuan in 2019, totaling 182.28. 100 million yuan. It is worth mentioning that yesterday (April 13), the State Administration for Market Regulation, together with the Central Cyberspace Administration of China and the State Administration of Taxation, held an Internet platform enterprise administrative guidance meeting and pointed out that the forced implementation of the “two alternatives” issue is particularly prominent, and it is the capital of the platform economy. A prominent reflection of willful and disorderly expansion is a flagrant trampling and destruction of the market competition order. The forced implementation of “choose one” behavior restricts market competition, curbs innovation and development, and harms the interests of operators and consumers on the platform. It is extremely harmful and must be resolutely cured. In response, Meituan issued a letter of undertaking to operate in compliance with laws and regulations, stating that it respects the right of independent choice by operators on the platform, does not use unreasonable restrictions and other measures to force merchants to “choose one of two”, and does not use technical means to implement monopoly agreements and abuse the market. Dominant behavior eliminates and restricts market competition, and fulfills the obligation to declare concentration of business operators in accordance with the law. Do not carry out unfair competition, price violations, and publishing illegal advertisements, and support the supervision and law enforcement work of market supervision departments, and accept social supervision. Once clues of illegal activities are found, report them to the regulatory authorities in a timely manner and actively cooperate with the investigation and handling. Baidu, JD, ByteDance, Meituan “Yes” to strengthen compliance management After the State Administration of Market Supervision, the Central Cyberspace Administration of China, and the State Administration of Taxation held an administrative guidance meeting for Internet platform companies, on April 14, Internet platform giants and upstarts such as Baidu, JD.com, and Bytedance issued the “Operation Commitment in Compliance with Laws”. Among them, antitrust, personal information protection, and intellectual property protection have become the focus of compliance. This is just the beginning. From April 14th, for three consecutive days, the State Administration of Market Supervision will collectively announce the “Operation Commitments in Compliance with Laws and Regulations” of 34 Internet platform companies participating in the conference. Antitrust and personal information protection become the focus of compliance The companies that announced the “Operation Commitment in Compliance with Laws” include Baidu, JD.com, Meituan, Qihoo 360, Weidian, Sina Weibo, ByteDance, Dingdong Maicai, Pinduoduo, Xiaohongshu, Suning.com , Vipshop. There are both e-commerce platforms and content platforms. These platform companies promise to strictly abide by laws and regulations, implement platform legal responsibilities, further improve the platform compliance system, strengthen compliance training for corporate employees, and strengthen daily operation self-inspection. Sorting out the commitments of the above-mentioned companies, antitrust, personal information protection and intellectual property protection have become the focus of compliance for platform companies. “Choose one of the two” has become a high-frequency word. JD.com promises that it will not implement “choose one of the two”, not abuse its dominant market position, not implement monopoly agreements, not illegally implement operator concentration, not implement unfair competition, and not implement unfair price behavior; Meituan says it respects operations on the platform The owner has the right to choose independently, and does not force merchants to “choose one of the two” through unreasonable restrictions and other measures. Yesterday’s meeting of the three departments focused on the forced implementation of the “two alternatives” issue, saying that this issue is particularly prominent. The meeting stated that the forced implementation of “choice of two” is a prominent reflection of the willful and disorderly expansion of capital in the field of platform economy, and it is a blatant trampling and destruction of the order of market competition. The forced implementation of “choose one” behavior restricts market competition, curbs innovation and development, and harms the interests of operators and consumers on the platform. It is extremely harmful and must be resolutely eradicated. The protection of personal information is also a key content of the major platforms’ commitments. Yesterday’s meeting pointed out the problem of platform enterprise information leakage and said that “it must be rectified seriously.” Like ByteDance promises, no illegal collection and misuse of personal information. On the premise of ensuring that users are informed, collect and use user information in accordance with the law in accordance with the principle of “least necessary”. Xiaohongshu stated that it does not illegally collect or misuse personal information, and follows the principles of justification, safety, and legal use. Algorithmic discrimination is still worthy of vigilance In addition to the common “key points” mentioned above, the commitments of some companies are also worthy of attention. Like the 360 ​​promise, we insist on objectively and neutrally setting search and sorting algorithms. Suning also stated that it does not engage in substantively coordinated behaviors through data, algorithms, platform rules, or other means, which will undermine the fair competition environment in the market. The use of operations such as setting search and sorting algorithms for platform self-treatment has a certain degree of concealment. Experts have pointed out that the sorting strategy will be a very mainstream behavior of platform self-treatment. In the Internet era, platforms must not only build user stickiness, but also acquire user traffic. Information screening and presentation are the core means to increase user stickiness and gain user traffic. Liu Xiaochun, executive director of the Internet Rule of Law Research Center of the University of Chinese Academy of Social Sciences, said that almost all services, not only search engines, have problems with ranking strategies. The ranking strategy is likely to determine the competitiveness of operators in the platform ecology. Deng Zhisong, a senior partner of Dacheng Law Firm, told the 21st Century Business Herald that technology and algorithms are the core competitiveness of the networking platform. Internet platform-related competitions are generally conducted through technology and algorithms, and there are many suspected monopolistic behaviors that the public is familiar with, including “choice of two”, “big data to kill familiarity”, “algorithm collusion” and so on. Yesterday the three-department meeting put forward the “five strict preventions”, including strict prevention of technology stifling, strict prevention of rule and algorithm abuse, and strict prevention of system closure. Among the companies announced this time, apart from the algorithmic discrimination issue clearly raised by 360 and Suning, other companies did not express their views on this. Emphasize platform self-regulation and establish a compliance system To a certain extent, the commitments of some companies have also responded to the focus of public attention. Pinduoduo, which was previously regarded as “barbaric growth”, promised to strictly regulate the behaviors of operators on the platform that do not obtain relevant administrative licenses to engage in business activities, consumption fraud, fraudulent transactions, false propaganda, etc. Strengthen the control of counterfeit and shoddy goods, implement food safety guarantee obligations, and protect the personal and property safety of the people. Sina Weibo promises to ensure that platform information is legal and compliant, and resolutely not allow the Weibo platform to become a platform for disseminating illegal marketing information and harmful information. The Internet era has brought many new social propositions. Since last year, the “digital divide for the elderly” has attracted widespread attention from the society. Baidu’s letter of undertaking stated that it will further promote the protection of the rights and interests of netizens, paying particular attention to the protection of the elderly and minors, and enhance the protection of netizens’ rights and interests. According to the requirements, all Internet platform companies will conduct a comprehensive self-inspection and self-examination within one month, and complete rectifications one by one. He Yuan believes that this reflects a change in law enforcement and supervision thinking, which is no longer just a national mandatory regulation, but also emphasizes platform self-regulation and establishment of a compliance system to form a comprehensive governance. “It is not to put all the responsibilities in the hands of the regulators, but to put pressure on companies to also comply with regulations and urge them to improve their corporate governance structure.” He analyzed that the current law enforcement logic sets a red line for the government, and the platform does a good job of self-discipline and builds a compliance system. The government takes regulatory measures afterwards. Once the regulatory red line is violated, it will initiate national compulsory regulation, such as high fines. , To form a deterrent to platform companies. Source: Associated Press Choi, titanium media, 21st Century Business Herald (Author: Wang Jun, etc.)

Recently, the Huai’an Intermediate People’s Court of Jiangsu Province issued a judgment on Meituan’s unfair competition. This case is the first application of Article 12 of the “People’s Republic of China Anti-Unfair Competition Law” that came into effect on January 1, 2018. Infringement cases of unfair competition in the takeaway field. The civil judgment shows that Beijing Sankuai Technology Co., Ltd. (Meituan) will compensate Shanghai Lazars Information Technology Co., Ltd. (Eleme) with a compensation of 352,000 yuan. The reporter learned that in the judgment, the court also found a number of cases where Meituan forced merchants to “choose one of two”, including forcing merchants to “exclusively cooperate” with the platform by narrowing the scope of delivery. In addition to Meituan, recently, the case of Ele.me Wenzhou forcing merchants to “choose one of two” also came to an end. The Intermediate People’s Court of Wenzhou City, Zhejiang Province determined Ele.me was involved in unfair competition in this incident and ordered it to compensate Beijing Sankuai. Online Technology Co., Ltd. (Meituan Waimai) economic loss of 80,000 yuan. According to the judgment, the employees of Ele.me asked the merchants involved in the case to close their online stores on the Meituan food delivery platform, forcing them to sign an exclusive cooperation agreement with Ele.me.com. After being rejected, they log in to the merchant account and close their stores on the platform, which was improper. The subjective maliciousness of the competition is obvious, harming the interests of merchants, and seriously hindering and undermining the normal operation of the network services legally provided by the operators of Meituan Waimai and other food delivery platforms. The court ruled that the above behavior of the Wenzhou Branch of Lazas Company (Ele.?) was an act of unfair competition under the Anti-Unfair Competition Law. In February 2016, the Legislative Affairs Office of the State Council published the “Law of the People’s Republic of China on Anti-Unfair Competition (Revision Draft for Review)” to solicit public opinions. Article 13 of the draft for review specifically stipulates four acts of Internet unfair competition. , Is called “Internet Special Article.” The knife of the new anti-French Internet article goes beyond the field of foreign trade. It is worth mentioning that on April 13, the State Administration for Market Regulation, together with the Central Cyberspace Administration of China and the State Administration of Taxation, held an Internet platform enterprise administrative guidance meeting. In response to the prominent problems in the field of platform economy, such as the forced implementation of “two options and one”, the “five strict preventions” and “five guarantees” are proposed, and all Internet platform companies are clearly required to conduct self-inspection and self-examination within one month, and make rectifications one by one. Beginning on the 13th, for three consecutive days, the State Administration of Market Supervision will collectively announce the “Commitment to Operate in Compliance with Laws and Regulations” of the 34 Internet platform companies participating in the conference. The first batch of Internet platform companies that disclosed the “Operation Commitment in Compliance with Laws and Regulations” to the public are Baidu, JD.com, Meituan, Qihoo 360, Weidian, Sina Weibo, ByteDance, Dingdong Maicai, Pinduoduo, Xiaohong Book, Suning Tesco, Vipshop. Under the anti-monopoly environment, platform-based economic enterprises were the first to bear the brunt. On the 13th, Meituan fell more than 8% during intraday trading, and its share price hit a new low this year. Counting the decline in the previous day, Meituan-Dianping has fallen by more than 12% in the two trading days. Industry insiders believe that the Huai’an and Wenzhou cases, from the perspective of judicial adjudication, have further consolidated the impropriety of the forced “choose one” behavior of takeaway platforms, and played a very positive role in maintaining a healthy business environment. At the same time, with the clarification of judicial attitudes and the intensification of anti-monopoly supervision, Internet platforms in an advantageous position will be more restricted, and the biggest beneficiaries will be catering merchants in a disadvantaged position.