Europe and China: A Common Antitrust Goal?

Europe and China: A Common Antitrust Goal?

On 10 November 2020, one day shy of the huge Singles’ Day sale in Asia, we saw antitrust updates emerging out of two major economies: the European Union and China. It was almost as though the two regulators had coordinated their announcements to deal a double blow to the tech industry. However, while both announcements targeted platform economies, there is a distinct difference between them.

In Brussels, the European Commission (EC) announced that it has sent its Statement of Objections to Amazon over the use of non-public independent seller data. The EC’s preliminary view is that Amazon’s use of non-public marketplace data allows it to avoid the normal risks of retail competition and leverage its dominance in the market for the provision of marketplace services in France and Germany.

While many eyes were on Europe, on the other side of the world, the Chinese State Administration for Market Regulation (SAMR) published for public comments its draft guidelines for anti-monopoly in the platform economy. The significance of these draft guidelines is due to the fact that this is the first time the Chinese regulator has attempted to draw the line about which practices can be deemed as anti-competitive. The draft guidelines consider various practices, including the obligation for vendors to exclusively transact on one platform.

So far, the scenario appears to be a general one of regulators targeting platform companies. However, there are distinct nuances in each case. Europe demonstrates a desire to create local champions. Besides the ongoing investigations against Big Tech (note: non-European) firms in Europe, there are efforts to build European data infrastructure to break the dominance of American and Chinese firms.

In contrast, the antitrust update in China sends a signal to its local champions that regulators can still come after them if they choose to. The antitrust draft in China, posted one day before Singles’ Day, a major event for Alibaba, is construed to be a message to Jack Ma. He had earlier criticised China’s financial regulators for having a “pawnshop mentality” and argued that the economy needs bold new players to extend credit to the collateral poor. Alibaba is not the only target. The government had earlier gone after Tencent for its music services and its exclusive agreements with publishers. The Chinese government appears to be trying to reduce the influence of the few Chinese tech firms that have huge stakes in the economy.

These regulatory developments highlight that tech firms should track the developments of antitrust scrutiny across all markets; it is not particular to a certain region. More antitrust developments are to be expected in the coming year, and it remains to be seen how the transition from the Trump to the Biden Administration will impact antitrust investigations in the US.

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