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Written by: Yang Yingwei
2021-04-16 20:59
Last update date: 2021-04-16 21:01
Last Saturday (April 10), the mainland e-commerce giant Alibaba received a 18.2 billion yuan fine from the State Administration for Market Regulation, the largest amount ever in the mainland’s Anti-Monopoly Law.
Many Hong Kong people who watch the fire from the shore generally suspect that the fines originated from Alibaba Group founder Jack Ma’s speech at the Shanghai Bund Financial Forum in October last year, after he “accused” the Chinese financial regulators, and was "settling accounts" by the authorities.
This kind of commentary that "government supervision" is infinitely "demonized" as a "political weapon" for the elimination of dissidents. It can be seen that Hong Kong lacks sufficient understanding of the mainland's economic system. In addition, we have always regarded a free economy as a standard. It is inevitable that we will misunderstand the relationship between the government and the market. He even avoided the "visible hand" and "happily" indulged the monopoly of the consortium.
If Hong Kong wants to break through the blind spots of thinking, it must first objectively understand the whole story of Ali's punishment, and then understand the supervision logic of the mainland authorities.
"Anti-monopoly" focuses on "monopoly"
After the news that Alibaba was fined the sky-high price, many Hong Kong people asserted that this was Ma Yun's "ruthlessness". Following the sudden suspension of the listing plan of his "Ant Financial", the mainland authorities once again "retaliated against Alibaba." ".
For example, Gu Shuwei, a freelance writer who served as the director of the pan-democratic community, recently made a comment, saying that the Beijing government had "trial" on Ma Yun's energetic speech and "record-breaking" imposed a 4% fine on Alibaba's turnover; It also pointed out that the official “political meaning is far greater than the actual meaning” of Alibaba, which can highlight the country’s “talking power”; even taking companies such as Gome and Brilliance as examples, asserting that the central government has always used “political means” to deprive the rich’s assets. "nationalization".
Such remarks are indeed quite common, but they are also really ridiculous.
In the final analysis, the technology network market is also a market, and monopoly refers to a "bottleneck" in the development of a market economy to a certain degree. There are many examples in countries around the world.
Before Ali, the online retail platform Amazon (Amazon) was launched a second antitrust lawsuit by the European Union, and was accused of abusing its market monopoly position in Germany and France; and the social media giant Facebook was also sued by the US Federal Trade Commission (FTC) for antitrust lawsuits. litigation.
Microsoft, Google, Apple, and Chinese and Western Internet giants are all subject to varying degrees of supervision. Why does it become "retaliation" when it falls on Jack Ma?
The State Administration for Market Regulation of China announced its "choice of two" monopoly against Alibaba and imposed heavy fines of 18.228 billion yuan, the most in Chinese history.
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What's more, the fundamental reason for the emergence of "anti-monopoly" is not "anti-monopoly" but "monopoly."
Based on the development characteristics of the platform economy, it has indeed become a monopolistic "severe disaster zone."
Li Nan and Chen Kaiyu, members of the Banking Research Team of the Industry Research Institute of Shanghai Jiaotong University, explained in "Alibaba's Punishment to See the Next Step of the Platform Economy" (hereinafter referred to as "the next step of the platform economy") that the development of the platform economy depends on the "network effect", that is, the platform The larger the number of users, the higher the value of platform services. When the user scale reaches a critical point, the platform will have a "siphon effect", attracting more new customers, and it is easy to form a "winner takes all" phenomenon.
Of course, not all monopolies need to be "supervised", but when "monopoly" affects market order and market innovation, the government will inevitably take steps to solve the problem-this is the logic of supervision.
For example, the "choice of two" behavior that Ali was punished was called "exclusive agreement" in law, which is very common in the current booming digital economy.
However, it needs to be added that "choosing one of the two" does not necessarily mean "monopoly."
Yang Dongzeng, director of the Financial Technology and Internet Security Research Center of the National Development Institute of Renmin University of China, who participated in the design of Article 12 of the 2017 New Anti-Unfair Competition Law, published in the Economic Information News as early as 2019 I wrote the article "Whether "Two Elect One" Is Monopoly Cannot be Generalized", explaining the legal principle of the penalty for "two alternative one"-a typical exclusive agreement is legal, because it can help achieve business goals and is also a competitive means favored by enterprises; The violation of the "Anti-Monopoly Law" by exclusive agreements must be based on the premise that "the implementing entity occupies a dominant market position", specifically involving two kinds of behaviors that abuse the dominant market position: restricted transactions or vertical monopoly agreements.
Yang Dong emphasized that in the absence of a dominant market position, even if the "two alternatives" are implemented, the restricted parties can still choose other entities to conduct transactions, and the scope of market competition is limited, which is not necessarily "illegal."
Looking closely at the "Administrative Punishment Decision" issued by the State Administration of Market Supervision and Administration last Saturday, Alibaba is actually not "injustice" at all.
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Supervision is right and wrong
Looking closely at the "Administrative Punishment Decision" issued by the State Administration of Market Supervision and Administration last Saturday, Alibaba is actually not "injustice" at all.
The regulatory authority has demonstrated three key points in the over-10,000-character document: 1. Alibaba is in the domestic online retail platform market. This market constitutes a separate commodity market, and offline retail regulations cannot be applied. It needs to be regulated according to local conditions; 2. Demonstration of Alibaba’s dominant market position in the industry from seven aspects, including market share, market concentration, and market control capabilities. Third, multi-party evidence lists that Alibaba has abused its dominant position and disrupted the order of market competition.
Specifically, Alibaba requires merchants that open online stores on its platform not to open stores on competitors' platforms, and prohibits merchants from participating in competitors' promotional activities.
During the period, Alibaba even used incentive measures such as traffic support, as well as punitive measures such as reducing resources for promotional activities, canceling qualifications for participating in promotional activities, and reducing search rights to ensure the implementation of the above requirements.
Alibaba’s “choose one” behavior hurts the market in three ways: For merchants, Alibaba is the largest online retail platform in China and the most important sales channel. If they violate the agreement, they will be affected by the platform. The "penalty" of the company will lose the main source of customers, and its business activities will also be directly affected; for competitors, the online retail platform that is less well-known than Ali will be unable to attract merchants and expand its scale due to the "two-choice", and finally fall into vicious Circulation, market entry barriers are raised, and the disguised "increasing the difficulty of the game" not only stifles potential innovations but also harms the market order. Finally, consumers appear to be the most passive and their shopping choices are invisibly restricted. When buying certain brands of goods You can only choose Ali, and you cannot enjoy other consumer services that may be more innovative, convenient, and affordable.
"Markets with network effects are not always effective. Appropriate supervision is necessary to limit the negative externalities brought about by anti-competitive strategies, protect the rights and interests of merchants and consumers, and create a fair competition and sustainable market. Environment.” The aforementioned scholar’s article “The Next Step of the Platform Economy” pointed out that the core of platform supervision lies in balancing the positive and negative effects of the network. “How to give full play to the positive effects and vitality of the platform economy while controlling the capital’s hobby created by monopoly? "Blood Nature" is a difficult problem faced by market designers and regulators in the Internet era."
The rapid expansion of mainland technology and Internet companies represented by Alibaba in the past ten years is partly due to the lack of supervision dividends.
In the past, the Chinese government was worried that over-regulation would stifle innovation. Therefore, the supervision of technology companies has always been tolerant. It has proposed solutions to various problems caused by innovation in accordance with local conditions.
Take the Ant Group as an example. Its predecessor, "Ali Microfinance", was born in Chongqing. It initially used the "asset-backed securitization" model to recycle 40 times, with a capital of 3 billion yuan for loans of more than 300 billion yuan, with a leverage ratio of 1 to 1. 100, because at that time the Securities Regulatory Commission did not clearly limit the number of cycles of ABS loan assets.
Huang Qifan, the mayor of Chongqing at the time, later recalled in his book "Structural Reform—Problems and Countermeasures of China's Economy" that in order to monitor financial risks without harming financial innovation, he put forward three suggestions to adjust supervision: The China Securities Regulatory Commission will limit the number of ABSs. Within four times; the leverage ratio of online loans is limited to about 10 times; small loan companies gradually increase the principal pool to 30 billion yuan.
"This is a happy ending. The regulatory authorities have improved the system and mechanism to solve the high leverage risk. The Chongqing area has increased the capital of financial enterprises by tens of billions, and the Ant Financial Loan Company has been able to resume operation." Huang Qifan concluded in the book. You cannot use a one-size-fits-all approach to financial innovation, "Don't "splash children when you splash dirty water.""
The rapid expansion of mainland technology and Internet companies represented by Alibaba in the past ten years is partly due to the lack of supervision dividends.
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Realign the balance of regulation and innovation
However, with the continuous expansion of technology platforms, the impact of technology giants on the people's livelihood and economy has become more and more significant, the barbaric growth of technology platforms, and unfair competition behavior frequently occur.
Against this background, Xi Jinping, President and General Secretary of the Communist Party of China, personally mentioned "strengthening anti-monopoly and preventing the disorderly expansion of capital" at the Politburo meeting, and realigned the balance of supervision and innovation.
Whether it is the potential "systematic financial risks" under the Ant Group's high-leverage asset-light model, or the sub-Alibaba platform's "choose one" behavior has become a typical representative of "disorderly expansion of capital," the central government has already set the tone. Use "visible hands" to solve the pain points and blockages in the development of such a market economy.
And Ali's "top grid" punishment is more like a move by the supervisor to break the game.
In terms of penalties, fines will never be "breaking one's nerves and bones," but rather like "good words to persuade you."
For this Chinese tech giant, a fine of less than 20 billion yuan is just a drop in the bucket.
Alibaba vice chairman Cai Chongxin said on Monday (April 12) that Alibaba's cash, cash equivalents and short-term investments totaled 456.3 billion yuan until the end of last year, and the fine was only 20% of the free cash flow in the next 12 months.
The market also holds the same view. Big banks such as Morgan Stanley and CITIC Securities have stated that Ali’s "uncertainties have been eliminated" and that the penalties have been milder than expected.
Alibaba's stock price rebounded by 8% on its first trading day, causing its market value to soar by nearly 300 billion yuan, and this mere 18 billion yuan is simply "not enough."
As far as the targets of punishment are concerned, putting the most successful Chinese science and technology companies on the stage demonstrates the government's determination to "fight the tiger."
Although China's financial supervision and anti-monopoly began with "ants", it will never stop at Ali.
Cai Chongxin publicly disclosed that regulators are reviewing large-scale mergers and acquisitions across the industry, not against a single company.
In addition, there are media reports that the Municipal Supervision Bureau is expanding the scale of the Anti-Monopoly Administration and intends to increase the manpower, budget, and number of investigation projects for anti-monopoly investigations.
Although China's financial supervision and anti-monopoly began with "ants", it will never stop at Ali.
On Wednesday (April 14), two mainland food delivery platforms, Meituan and Shipaishi, were punished by regulators for "choosing one of two" behaviors.
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"The fines imposed on Alibaba are by no means the end of the anti-monopoly wave. More similar investigations will emerge in the next few years." Zhang Huyue, associate professor of the School of Law of the University of Hong Kong and Director of the Center for Chinese Law Studies, accepted the "Hong Kong "01" said in the interview that Ali’s fines have released a "strong regulatory signal": "Exclusive business practices in the technology sector will no longer be forgiven. Other technology giants will use Ali as an example to adjust to the increasingly tight regulatory environment. "
Sure enough, on Wednesday (April 14), two mainland food delivery platforms, Meituan and Shipaishi, were punished by regulators for "choosing one of two" behaviors.
The Municipal Supervision Bureau also announced the "Operation Commitment in Compliance with Laws and Regulations" (the second batch) of Internet platform companies the following day (April 15), including Tencent, Didi, Kuaishou, Bilibili, Gome Online, Hema Fresh, Ctrip, etc. Eleven mainland technology and Internet companies in various fields have signed a letter of commitment to ensure that they will make compliance adjustments within one month and will not implement monopolistic behavior.
As the so-called "good medicine is bitter," Ali, as a tech giant, can get back on track after being "gently warned" to drive healthy growth with innovation and achieve "Phoenix Nirvana."
Other science and technology companies can also learn from this, carry out internal rectification from the bottom up, jointly safeguard the rights of consumers and a good market competition order, and promote the economic development from high-growth to high-quality development.
The out-of-control market in Hong Kong reflects the lack of supervision and regulation, leading to the monopoly of consortia.
The permanent high property prices are a typical example.
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Think about Hong Kong instead of watching the fire from the shore
The competition of the mainland science and technology platform has proved that for any market economy to develop in a healthy and orderly manner, self-regulation by the "invisible hand" alone is not enough. The "visible hand" needs to be corrected in time to prevent the side effects of the market economy.
Like Hong Kong people who are obsessed with the war of words between Jack Ma and the government, they simply equate technology companies as "lone heroes" and equate supervision with "political warnings." It can only be said that many commentators have too one-sided understanding of economic operations, and only see trees. No forest.
Of course, in a highly politicized public opinion environment, it is not surprising that this kind of thinking that holds negative views every time the "central government takes action" is not surprising, because "regulation" and "public power" will be "demonized" into authoritarian "authorities". evidence".
However, instead of criticizing others, it is better to reflect on yourself-the out-of-control market in Hong Kong reflects the lack of supervision and regulation, leading to the monopoly of consortia.
The ever-high property prices are a typical example.
According to Demographia, an international survey agency, as of early 2021, Hong Kong has been the world’s most unaffordable place for property prices for 11 consecutive years. It is estimated that an average four-person house will take an average of 20.7 years without eating or drinking to purchase a 500 square foot building. unit.
The Hong Kong society blames the high property prices on the shortage of housing, while the SAR government blames the shortage of housing on the serious shortage of land, but the reality is that the authorities have long since given up the power to lead land development and housing supply and handed over them to real estate merchants in disguise. They created a monopoly on land and even housing.
Take the long-term "appropriation of land" system as an example. The government first puts the land intended for sale into the "applicable land form", and then the developer who intends to buy applies to the authorities and quotes. If the relevant price can meet the government's market price The estimated reserve price can be used to draw out the land. Under the situation that the government has been suppressing housing supply for a long time and property prices have skyrocketed, the direct result of this system is that the price of land remains high, and it is difficult for small and medium-sized developers to enter the market. competition.
Hong Kong has been the most expensive place to live among the 130 cities in the world for the second consecutive year, tied for the top spot with Zurich, Switzerland and Paris, France.
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Wu Junfei, deputy dean of the Tianda Research Institute, pointed out in the article "Monopoly: The Structural Issues of Hong Kong's Economy" that after owning land as the most basic factor of production, large consortia have expanded their business to other public utilities closely related to people's livelihood, such as Sun Hung Kai. Owning the KMB, the Wharf has the Star Ferry, Cheung Kong has the Hongkong Electric, Henderson has the China Gas and the Yau Ma Tei Ferry, etc., leading to misallocation of various social resources, inefficiency, economic decline, people's livelihood, and conflicts intensified.
The problem is that when the monopolistic behavior of the consortium has been entangled in Hong Kong, causing a series of problems such as high cost of living, disparity between the rich and the poor, and diminished economic vitality, the Hong Kong government still has no determination to "supervise" these monopolistic enterprises.
In particular, the Competition Commission, established in 2012, has become a "paper tiger." Even the Competition Ordinance, which was revised in 2015, cannot effectively regulate the above-mentioned cross-industry monopoly and abuse of market dominance.
"It’s been almost five years. The scale of the companies involved in the cases so far is relatively small." Cheng Jianhan, an associate professor at the Faculty of Law of the University of Hong Kong, who served as the chairman of the Competition Bill Working Group The ordinance conducts social lobbying work. In the end, in order to pass the ordinance, the government proposed the so-called "six major concessions" to the business community. "Is the "six major concessions" politically necessary? I don't know how to measure. But the "six major concessions" have greatly weakened it. The effectiveness of the regulations." Zheng Jianhan pointed out that the most important link is "abolition of private litigation." As a result, only the Competition Commission can file a lawsuit. However, "the Competition Commission has no more than 100 employees, and there are very few cases that can be investigated at the same time." All the responsibility for law enforcement is placed on the competition committee of such a small scale, and the role of the Regulations is quite limited.
Earlier, when the Vice Premier Han Zheng, who is in charge of Hong Kong and Macao affairs, met with representatives of the Hong Kong region attending the National "Two Sessions" in Beijing, he frequently mentioned Hong Kong’s "housing problems" and "the disparity between the rich and the poor", and demanded that those governing Hong Kong should effectively solve the problems of Hong Kong and Shenzhen. Level contradiction.
Consortium monopoly is originally one of the deep-seated contradictions in Hong Kong. How much did Hong Kong learn from the "anti-monopoly lesson" the central government gave to Alibaba?
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