China’s Antitrust Probe into the Platform Economy – A Comment on the Alibaba Decision

Abstract

Abstract China’s competition authority imposed a record fine against the largest domestic online platform operator Alibaba. The decision concludes that Alibaba abused its dominant position in the market for online retail platform services by prohibiting merchants from selling or participating in promotional events on rival platforms. This article provides an overview of the grounds of the decision and a detailed analysis in the context of China’s anti-monopoly regulations and guidelines for the platform sector. The Alibaba decision is well-structured and reasoned, but also leaves some open questions in its competitive assessment. In addition to the fine, the competition authority issued a guidance letter to Alibaba and initiated a three-year-long compliance monitoring. The penalty decision also has an industry-wide deterrent impact through the follow-up administrative supervisory meeting with major platform operators. The Alibaba decision marks a turning point in China’s antitrust interventions in the platform economy in the shift from a very tolerant and cautious approach towards a more proactive and stringent one.