China’s Anti-monopoly Enforcement Campaign Against Exclusionary Conduct of Two-Sided Platforms: A Case Study Abstract:

Abstract

The topic of this article lies at the intersection of two concepts: two-sided markets and exclusionary conduct. Compared to the difficulty of defining a two-sided market, the lack of consensus regarding what constitutes exclusionary conduct is more problematic. Generally, conduct is exclusionary when it harms the competitive process by weakening the rival firm’s ability to compete and the conduct does not constitute competing on the merits. However, what it means to “harm competition” or fail to “compete on the merits” is hotly debat - ed. Judging alleged exclusionary conduct requires an in-depth analysis of the market and the means used to achieve or maintain the monopoly. For instance, the U.S. court has established an analytical mechanism (rule of reasons) to examine both anticompetitive effects and procompetitive justifications within a structured, bur - den-shifting framework. As a result, this article focuses on how the Chinese antitrust enforcers identify the exclusionary conduct of a firm operating in a two-sided market. Part I is the introduction; Part II traces the Sixteen-year history of Chinese antitrust law up to the present. Part III surveys the characteristics of individ - ual cases of exclusionary conduct enforced in China. We examine how the Chinese enforcers establish their own “rule of reason” approach to justify the massive penalty imposed on the firms. Part IV concludes.