Research On Anti-monopoly Law Regulations Of The Platform Operator’s Tying Behavior

Tying is a traditional problem of the abuse of market dominance.The relevant legal system of the Anti-Monopoly Law in China has established a general framework for identifying illegal tying.However,with the emergence of various type of tying arrangements by platform operators in domestic and abroad,the constantly unsuitability in the current identification paradigm and regulation means also arose.The controversy of the dispute between Qihoo and Tencent over the abuse of market dominance reflects the practical dilemmas of the regulation of such new economic entities:as a result of dynamic and cross-border competition,it might be difficult to determine the dominant position of the market based on the market share presumption and the current comprehensive factors;the aggregation attribute of the platform product function determines that the function standard as the distinct product test could not be convincing anymore;multihoming of usership and free products make the coercion factor no longer significant,yet platform operators use product design and the control over distribution channels and display means to strategically exploit behavioral failures of consumer choice,which may still leverage their market power to another market so that construing their true intention to restrict competition and damages would be harder;in addition,various countervailing ’justifications’ appear to raise great ambiguity,lacking of clear way to reconcile the specific application of these defenses and their trade-off with anticompetitive effect.The Interim Rules on Prohibition against Abuse of Market Dominance issued in September 2019 lists some possible "justifications" for tying while removing the“coercion" requirement--the former adds some factors that could hinder the violation of the law,expanding the space for "excluding guilty" defenses to some extent;whereas the latter significantly lowers the regulatory threshold,raising the possibility of "guilty"--which makes the regulatory strength doubtful and whether the judicial treatment need to be coordinated is still a problem that might be faced in the following revision of the Anti-Monopoly Law.Under China’s diverse anti-monopoly value system,the core consideration of regulating platform tying is how to strike a balance between freedom of consumer choice and internalization of network externality,as well as the freedom of platform product design and the limits of fair competition liability.Based on the analysis of the economic feature of platforms,plus the regulation experience of foreign legal system and practice,this article proposes the following suggestions for addressing the unsuitability of traditional regulations:First of all,the approach of behavior and effect presumption could be introduced in the identification of market dominance,that can be implemented by relying on the open provision in Article 18 of the Anti-Monopoly Law and clarifying the burden of proof in civil proceedings;secondly,the consumer demand should be taken as the feasible standard to determine whether two products are distinct from each other,setting an anticipated observation period as well as judging with other indirect evidences;finally,it is necessary to emphasis the analysis of the economic effect of platform tying,which could explicit the proper application of defenses and comprehensively weigh procompetitive and anticompetitive effects.Meanwhile,the analysis tools of the behavioral economics could be included in the effect analysis,so as to get a grip on the case reality of platform tying and design effective remedies for competitive harm.