Fighting Internet Monopolies in China and the U.S.A.

47
DOI: 10.20542/0131-2227-2022-66-10-73-80
Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, 23, Profsoyuznaya Str., Moscow, 117997, Russian Federation.

Received 29.06.2022. Revised 27.07.2022. Accepted 08.08.2022.

Abstract. Since 2010s growth of the biggest Internet corporations (Big Tech) formed new monopolization challenges, from takeovers of competing start-ups to anti-competitive practices. Initially, regulators were not active, considering complexity of antitrust policies for the high-tech sector (e.g., not to demotivate R&D investments) and specifics of Internet markets (network effects, etc.). But since 2020 situation changed dramatically. Despite the active EU’s role in developing model digital norms, special attention should be paid to the U.S.A. and China (as countries of origin of Big Tech and key Internet markets). In both economies, regulators previously executed a non-restrictive approach to the Internet markets and Big Tech, also as factor supporting their development and global leadership. But rising challenges and political events triggered new antitrust attack. For the PRC it was Jack Ma’s speech amid rising concerns of the CPC leaders about income asymmetries. In the U.S.A. it was Trumpists’ war on the “liberal media” and changes in long-term “alliance” between Democrats and Big Tech. Since 2020 China started antitrust investigations against Big Tech and other Internet corporations, imposed fines, and developed new regulations. In the U.S.A., due to the specifics of the legal and political system, focus was made on forming political and legal basis for further regulatory actions. Several lawsuits were initiated, critics of Internet monopolies were assigned on key positions in federal antitrust bodies, while Congress elaborated draft acts. Theoretical analysis shows that in both nations focus was made on the sharpest (for society and politicians) changes. New initiatives do not pose a threat to Big Tech’s innovation activities yet. Less obvious is their correspondence to the digital economy specifics. So, it is still hard to understand whether these actions will lead to rise of innovations and competition. Long-term systematic development of regulation is needed – as well as serious theoretical research on “digital antitrust”.

Keywords: internet markets, Big Tech, antitrust policy, innovations, USA, China


REFERENCES 

1. Hart D.M. Antitrust and Technological Innovation in the U.S.: Ideas, Institutions, Decisions, and Impacts, 1890–2000. Research Policy, 2001, vol. 30, no. 6, pp. 923-936. Available at: https://doi.org/10.1016/S0048-7333(00)00165-7

2. Newman J.M. Antitrust in Digital Markets. Vanderbilt Law Review, 2019, vol. 72, no. 5, pp. 1497-1567. Available at: https://cdn.vanderbilt.edu/vu-wp0/wp-content/uploads/sites/278/2019/10/11172710/Antitrust-in-Digital-Markets-1.pdf (accessed 15.06.2022).

3. Autor D., Dorn D., Katz L. F., Patterson C., van Reenen J. The Fall of the Labor Share and the Rise of Superstar Firms. The Quarterly Journal of Economics, 2020, vol. 135, iss. 2, pp. 645-709. Available at: https://doi.org/10.1093/qje/qjaa004

4. Danilin I. Innovative Transformation of Superplatforms. International Trends, 2020, vol. 18, no. 4 (63), pp. 127-142. (In Russ.) Available at: https://doi.org/10.17994/IT.2020.18.4.63.2

5. Kamepalli S.K., Rajan R., Zingales L. Kill Zone. NBER Working Paper 27146. 2020. 48 p. Available at: https://www.nber.org/system/files/working_papers/w27146/w27146.pdf (accessed 15.06.2022).

6. Ivanova N.I., ed. Innovative competition. Moscow, Ves’ Mir, 2020. 216 p. (In Russ.)

7. Freeman W.C., Sykes J.B. Antitrust and “Big Tech”. CRS Report R45910, 2019. Available at: https://fas.org/sgp/crs/misc/R45910.pdf (accessed 15.06.2022).

8. Schumpeter Y. Capitalism, socialism, and democracy. Moscow, Ekonomika, 1995. 540 p. (In Russ.)

9. Thiel P. Zero to One. Moscow, Alpina Publisher, 2015. 192 p. (In Russ.)

10. Christensen C. The Innovator`s Dilemma. Moscow, Alpina Publisher, 2019. 240 p. (In Russ.)

11. Evans D.S., Schmalensee R. The Industrial Organization of Markets with Two-Sided Platforms. NBER Working Paper 11.603, 2005. Available at: http://www.nber.org/papers/w11603.pdf (accessed 15.06.2022).

12. Pasquale F. Paradoxes of Digital Antitrust: Why the FTC Failed to Explain Its Inaction on Search Bias. Harvard Journal of Law & Technology – Occasional Paper Series, July 2013. 21 p. Available at: https://jolt.law.harvard.edu/assets/misc/Pasquale.pdf (accessed 15.06.2022).

13. Martens B. An economic perspective on data and platform market power. JRC Digital Economy Working Paper 2020-09, JRC122896. Available at: https://joint-research-centre.ec.europa.eu/system/files/2021-02/jrc122896.pdf (accessed 15.06.2022).

14. Ezrachi A., Stucke M. E. Virtual Competition. Cambridge, Harvard University Press, 2016. 368 p.

15. Khan L.M. Amazon’s Antitrust Paradox. Yale Law Journal, 2017, vol. 126, pp. 710-805.

16. Emch A. Antitrust and the internet: is China different? Competition Law International, 2019, vol. 15, no. 2, pp. 171-173.

17. You C. Law and policy of platform economy in China. Computer Law & Security Review, 2020, vol. 39. DOI: 10.1016/j.clsr.2020.105493

18. Colino S.M. The case against Alibaba in China and Its wider policy repercussions. Journal of Antitrust Enforcement, 2022, vol. 10, iss. 1, pp. 217-229. DOI: 10.1093/jaenfo/jnab022

19. Chu D., Chi J. China amends Anti-Monopoly Law for the first time amid tech crackdown, increasing penalties and regulatory control. Global Times, 07.07.2021. Available at: https://www.globaltimes.cn/page/202107/1228110.shtml (accessed 15.06.2022).

20. Hong I. Chinese court may rule on legality of firms keeping facial data. Asia Financial, 24.12.2020. Available at: https://www.asiafinancial.com/chinese-court-may-rule-on-legality-of-firms-keeping-facial-data (accessed 15.06.2022).

21. O’Connor N. Reforming the U. S. Approach to Data Protection and Privacy. Washington, Council on Foreign Relations, 2018. Available at: https://www.cfr.org/report/reforming-us-approach-data-protection (accessed 15.06.2022).

22. Pao J. China’s monopoly-busting to reach way beyond Big Tech. Asia Financial, 27.04.2022. Available at: https://asiatimes.com/2022/04/chinas-monopoly-busting-to-reach-way-beyond-big-tech/ (accessed 15.06.2022).

23. Conner A., Simpson E. Evaluating 2 Tech Antitrust Bills to Restore Competition Online. American Progress, 06.2022. Available at: https://americanprogress.org/wp-content/uploads/2022/06/OnlineCompetition-report.pdf (accessed 15.06.2022).

SOURCES 

1. The Digital Transformation of SMEs. Paris, OECD Publishing, 2021. Available at: https://doi.org/10.1787/bdb9256a-en

2. Antitrust in China – 2021, Year in Review. Gibson Dunn, 11.02.2022. Available at: https://www.gibsondunn.com/wp-content/uploads/2022/02/antitrust-in-china-2021-year-in-review.pdf (accessed 15.06.2022).


Registered in System SCIENCE INDEX

For citation:
Danilin I. Fighting Internet Monopolies in China and the U.S.A.. World Eonomy and International Relations, 2022, vol. 66, no. 10, pp. 73-80. https://doi.org/10.20542/0131-2227-2022-66-10-73-80



Comments (0)

No comments

Add comment







Indexed

 

 

 

 

Dear authors! Please note that in the VAK List of peer-reviewed scientific journals, in which the main scientific results of dissertations for the degree of candidate and doctor of sciences should be published for the “MEMO Journal” the following specialties are recorded:
economic sciences:
5.2.5. World Economy.
5.2.1. Economic Theory
5.2.3. Regional and Branch Economics
political sciences:
5.5.4. International Relations
5.5.1. History and Theory of Politics
5.5.2. Political Institutions, Processes, Technologies

 

Current Issue
2023, vol. 67, No. 9
Topical Themes of the Issue:
  • Contradictions and Conflicts in the Multilateral Trading System 
  • Global Climate Agenda: Big Gamble 
  • South Asia in Regional and World Politics 
  • Social Policy and Public Administration Ecosystems
Submit an Article
INVITATION FOR PUBLICATION
The Editorial Board invites authors to write analytical articles on the following topics:
  • changes in the processes of globalization in modern conditions
  • formation of the new world order
  • shifts in civilization at the stage of transition to a digital society

The editors are also interested in publishing synthesis articles / scientific reviews revealing the main trends in the development of certain regions of the world - Latin America, Africa, South Asia, etc.