Study On Non-pricing Competition Strategies Of Internet Platforms

In the two-sided markets,the platform usually adopts different competition strategies during the initial and mature stage.In the initial stage,pricing strategies are often used to attract both users to join the platform;during the mature stage,they will compete based on the existing large user size through various non-pricing competition strategies,such as non-neutrality strategy,ranking strategy and diagonal merger strategy.With the development and popularization of internet information technology,platform have rapidly emerged and flourished.In the process of rapid development,platform adopts various new non-pricing competition strategies to influence competition between users and platforms,which has led to the emergence of anti-monopoly issues and adverse events in platform,and has attracted the attention of academia and anti-monopoly practices.For example,a number of countries represented by the European Union and the United States launched an antitrust investigation into Google's own vertical search service,mainly accusing Google of abusing its dominance in the general search engine market and interfering with competition in the vertical search engine market.M&A review of Google's acquisition of Motorola's mobile case is launched in several countries represented by China and the European Union.M&A review of Google and DoubleClick mergers is launched in several countries represented by the European Union and the United States.The focus of these two M&A review cases is whether Google will transfer market power in the upstream key technology market to the downstream platform market in a vertically integrated structure.The "black workshop incident" of the China Meituan platform,Baidu "Wei Zexi incident",Taobao sellers collectively"siege" Tmall sellers incidents and other unfavorable problems are typical representatives,which highlights the problem of the platform abusing market dominance in the competitive process.The above anti-monopoly cases of platform enterprises reflect that the non-pricing competition strategy adopted by platform with large user size may affect the orderly competition among users and platforms.Specifically,what non-pricing competition strategies will be adopted by platforms with large user sizes,and whether these non-pricing competition strategies will affect competition between different types of users and competition between platforms?How does it influence the competition between users and platforms?And how do we evaluate the competitive effects?The study on this series of questions contributes to the development of the research on non-pricing competition strategies in the two-sided markets.And it has important theoretical and practical significance for enriching the platform competition theory and serving anti-monopoly practice in the two-sided markets.Based on the two-sided markets theory framework and the user heterogeneity and platform heterogeneity,this dissertation studies the non-pricing competition strategies's influence on users and platform adopted by platforms in the process of competition:non-neutrality strategy,ranking strategy and diagonal merger strategy through the analysis of the anti-monopoly cases.Firstly,based on the EU's investigation of Google's preferential vertical search engine case,this dissertation extracts the issues related to the two-sided markets theory in the anti-monopoly case,namely,the non-neutrality strategy of the platform.Then,starting from the heterogeneity of consumer and users type,based on the dominant market advantages and the role of key facilities owned by the platform,this dissertation explores the non-neutral relationship between the platform and different types of users,clarifying the path of consumer homing heterogeneity in non-neutrality strategy,and evaluating the effects of non-neutrality strategy through search experiments involving 500 keywords and 7500 test records and relevant data of comparison shopping,video,map,etc.Secondly,based on the conflict between Taobao sellers and Tmall sellers in Taobao Platform and the heterogeneity of consumers' preferences and sellers'types,and the dominant market advantages of the platform in the consumer side market,this dissertation explores the ranking relationship between the platform and heterogeneous consumers and different types of sellers under the ranking mechanism of the platform.Specifically,when the platform has the dominant market advantage on the consumer side,this dissertation explores what ranking strategy the platform adopts to adjust the ranking position among different types of sellers,and whether it will influence the choice of consumers by providing non-neutral information to consumers,and whether this will significantly affect the orderly competition between the platform's own sellers and competitive sellers.And by using the data captured by web crawlers,this dissertation verifies whether Taobao Platform is committed to influencing orderly competition between Tianmao sellers and Taobao sellers through ranking strategy.Thirdly,taking Google's acquisition of DoubleClick as the research background,with platform heterogeneity and cross-network externality as the starting point,based on the key technical facilities owned by upstream manufacturers,this dissertation explores the impact of diagonal integration on the size of users and platform performance.More specifically,we analyze whether the platform has incentives to implement the diagonal merger strategy,and the effect of the diagonal merger strategy;clarify the mechanism of the impact of platform heterogeneity and cross-network externalities on the user size in the merger process.What's more,we collect the relevant data of online advertising market before and after mergers to verify the impact of diagonal mergers on online advertising platform.Fourthly,we analyze the anti-monopoly cases and adverse events of platform in detail,and re-examine the anti-monopoly measures in order to draw new conclusions applying the theory of platform non-pricing competition strategy to anti-monopoly practice.This dissertation is divided into seven chapters.Chapter 1 is an introduction.Chapter 2 is the literature review.Chapter 3 focuses on the non-neutral relationship between the platform and users,taking the case of EU investigation on Google's preferential vertical search engine as example.In Chapter 4,we discusses the ranking relationship between platform and users in the background of Taobao sellers besieging Tmall sellers in the Taobao platform.Chapter 5 takes the merger of Google and DoubleClick as an example to explore the impact of diagonal merger strategy on the users size and profit of heterogeneous platform.In Chapter 6,we use the theory of non-pricing competition strategy that we have studied to analyze the non-neutrality strategy,ranking and diagonal merger strategy of Internet platforms,and re-examine the regulatory measures in anti-monopoly cases.Chapter 7 is the conclusion and policy recommendations.Since the existing anti-monopoly law only provides general terms for typical abuses,this dissertation provides a more specific theoretical reference and theoretical basis for anti-monopoly legislation and law enforcement through the study of new platform non-pricing competition strategies.Summarizing this dissertation,the main conclusions are as follows:First,in a two-sided market,a large user size can give the platform a certain market power which promotes the platform to be the essential facility.When the platform has a large size of users in one user market(e.g.consumer-side),users in the other side of the platform(e.g.seller-side)can acquire enough consumers only if they join the platform.If the sellers join the competitive platform,they will not be able to obtain enough consumers to make profit.The sellers are not able to rebuild new essential facility,too.This will result in platforms with large user sizes controlling the essential facility required by users.Second,when the platform has a market power in the user market,the platform as an essential facility has the ability and motivation to use the market power to intervene in the competition in adjacent markets.When the platform has a market power at the consumer side,it has the ability and incentive to adopt various strategies to pass the market power of the consumer side to the seller side,thus affecting the competition between different types of sellers.For example,the platform as an essential facility has incentives to adopt non-neutrality strategy to provide its own sellers with user size advantages;through the ranking strategy to adjust the ranking position between different types of sellers,thus affecting consumer choice,thereby affecting orderly competition among sellers.Third,when the platform controls essential facility,the non-neutrality strategy,ranking strategy,and diagonal merger strategy adopted by the platform may have anti-competitive effects.In the research of non-neutrality strategy,the platform displays the platform-owned sellers in a prominent position that consumers can easily find,and provide the user size advantage for their own sellers.Under this circumstance,competing sellers can't trade with consumers,which will lead to the acquisition of huge consumers by the platform's own sellers,forming a market foreclosure effect of own sellers.In the research of ranking strategy,based on the dominant market advantage of the consumer side,the platform places the low-volume competitive sellers in the position adjacent to the own sellers through ranking strategy,which significantly affects the fair competition between the platform-own sellers and the competitive sellers of the platform.In the research of diagonal merger strategy,platform acquires key technologies through diagonal merger.Then the integrated platform with key technologies has the ability and incentive to increase the price of key technologies or reduce the quality of services.This has led to the transfer of both sides users of the competitive platform to the diagonal integration platform.Thus forming the market foreclosure effect of integrated platform on competitive platform.The policy implications of this dissertation are as follows.The attitude and standard of anti-monopoly law enforcement agencies towards platform are still at an uncertain stage.In addition,with the exist of the cross-network externalities in the two-sided markets makes it difficult for the existing anti-monopoly rules to regulate the abuse of market dominance by platform.Therefore,in order to ensure fair and effective competition between platforms and users,platforms and platforms in the two-sided markets,we should innovate the concept of anti-monopoly regulation,specific methods and laws and regulations.