China and EU’s wisdom in choosing competition soft law or hard law in the digital era: a perfect match?

Abstract

The development of digital technologies has led to the emergence of new business models benefiting consumers in their searching, shopping and communicating activities. However, it also challenges the applicable competition law framework and enforcement. Although there seems to be a global consensus on the need to update competition law, the EU and China have chosen different regulatory tools—hard law and soft law, respectively—to address the new and complex challenges facing the competition governance of digital markets. This paper aims to explore why the EU opted for hard law while China opted for soft law, and to further examine whether the selected regulatory tool is the most appropriate in the specific context. By analyzing and comparing characteristics of the digital market and competition institutions’ powers in the EU and China, the paper concludes firstly, that, through the use of hard law, the EU is able protect the Internal Market and at the same time overcome the inflexibility of hard law by adding review articles. Secondly, the paper concludes that, through the use of soft law, China is able to take advantage of soft law to rapidly respond to public attention in the digital market and, at the same time, overcome the non-legally binding force of soft law by strengthening the power of its competition authority.