Antitrust Takes Center Stage in China?
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Privacy, Technology and Perspective
Antitrust Takes Center Stage in China? China is increasing both its antitrust-like regulation of its largest e-commerce companies, and its iron grip on consumer data and personal information. You can read about those developments by clicking on the following links:
https://technode.com/?s=antitrust
https://technode.com/?s=privacy
China’s Nine “Do Nots:” Prefacing China’s increased regulatory scrutiny is an “administrative guidance meeting” that took place in December, wherein the State Administration for Market Regulation (SAMR) warned China’s “big tech” companies to pay attention to problems of “low price dumping and squeezing jobs,” issuing a list of nine “must nots” or “do nots.” These include:
- Do not sell try to drive out competitors or monopolize markets by selling products below cost;
- Do not engage in “misleading and deceitful” marketing;
- Do not set up trust agreements in sales and pricing;
- Do not form mergers or consolidations that may result in monopolies without regulatory approval;
- Do not “illegally collect and use consumer data;” and
- Do not take advantage of data to harm consumers’ legitimate rights and interests.
For more on the “nine do-notes,” click on the following link:
American Parallels: Interestingly, both the Chinese government’s concern and its “nine do-not” proscriptions echo loudly in America’s experience and will sound familiar to American lawyers versed in trade regulation. Its concern involves “group buying practices” by large e-commerce sites which allow many consumers in a given area to pool their buying power (something like Groupon), buy at a lower price than they could get from local vendors, and get their merchandise from a trusted local intermediary. The net effect is to drive local merchants out of business – an allegation often hurled here, at WalMart.
Similarly, its response with “nine do-nots” sound very much like responses which American regulators have developed over the years to unfair trade practices. Selling below cost in order to drive out competitors is exactly what Americans call “predatory pricing.” Misleading and deceitful marketing is forbidden here by FTC regulation, state consumer-protection, and “Little FTC Acts” among many others. Unlawful trust practices are proscribed by the Sherman and Clayton Acts, among other federal and many state acts; and pre-merger approval of companies over a certain level of market share is already required here under Hart-Scott-Rodino. Even requirements not to “abuse consumer data” are growing in this country.
…except for Personal Information: What’s wildly different from the U.S. experience is that the Chinese government is simultaneously tightening its grip on consumer data of every kind. Notions of individual control over one’s own personal data are largely rejected in China; companies which do business in China must store that data there, disable encryption devices and systems, and allow the Chinese authorities access to it.
For an interesting story of the compromises Apple has had to make, click on the following link:
https://www.nytimes.com/2021/05/17/technology/apple-china-privacy-censorship.html
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Hosch & Morris, PLLC is a boutique law firm dedicated to data privacy and protection, cybersecurity, the Internet and technology. Open the Future℠.