Anti-monopoly is not only about "freedom of listening to songs" but also about fair market competition
Set traffic lights for capital expansion
Central Commission for Discipline Inspection and State Supervision Commission website Li Yunshu Chai Yaxin
On September 6, in response to issues such as platform monopoly, disordered competition, and disorderly expansion, Zhang Gong, director of the State Administration for Market Regulation, stated at a press conference of the State Council Information Office that the protection and promotion of fair competition must clarify the rules, draw the bottom line, and set a good one. "Traffic lights" consolidate the legal basis for anti-monopoly and prevent the disorderly expansion of capital.
In the next step, the market supervision department will effectively and orderly strengthen competition supervision, resolutely oppose monopoly, prevent the disorderly expansion of capital, focus on regulating the order of platform economic competition, and create a fair, efficient and orderly market competition environment.
Previously, Internet platform companies including Tencent, Meituan, and Alibaba, respectively, accepted investigations or penalties from anti-monopoly regulatory agencies.
There is no forbidden zone for antitrust, no exceptions.
Strengthening anti-monopoly and in-depth promotion of fair competition policies are not only about "freedom of listening to songs", "freedom of platform choice" and "freedom of payment methods", but also about protecting consumer rights, fair market competition and healthy development.
1 The State Administration for Market Regulation issued a fine, and the relevant platform waived the exclusive right to authorize music copyright
On August 31, Tencent issued a statement stating that it would waive the right to exclusively authorize music copyrights in the exclusive music copyright agreement with the relevant upstream copyright owners.
As soon as the news came out, it received widespread attention.
"As of August 23, our company has sent relevant letters to all upstream copyright parties that have reached exclusive agreements, informing them that they need to terminate the contract on time. Among them, most of the exclusive agreements have been terminated on time." Tencent said that those who failed to terminate the contract on time , Which waives the exclusive right to authorize music copyright.
Shortly before the announcement, NetEase Cloud Music revealed that the negotiation on copyright in the past month has not gone smoothly because some copyright owners stated that the contract with Tencent Music has not been terminated and that it is temporarily unable to conduct non-exclusive cooperation negotiations.
The reporter found that after Tencent Music gave up the exclusive copyright authorization, NetEase Cloud Music also removed the "exclusive" mark on the previous exclusive album songs.
This means that the situation that netizens and music fans have complained about for many years, "If you want to listen to a few songs, you need to switch back and forth between multiple music apps," is finally gone.
Tencent made this decision mainly based on the penalty decision issued by the State Administration for Market Regulation.
In January 2021, the State Administration for Market Regulation filed an investigation into the alleged illegal implementation of operator concentration in the acquisition of equity of China Music Group by Tencent Holdings Co., Ltd. in July 2016.
On July 24, the State Administration for Market Regulation announced the "Administrative Penalty Decision."
In addition to a fine of 500,000 yuan, Tencent and its affiliates are also required to terminate exclusive music copyrights within 30 days, stop payment methods for copyright fees such as high prepayments, and not require upstream copyright parties to give them conditions superior to their competitors without justifiable reasons.
"This is the first case of taking necessary measures to restore market competition order after the implementation of the Anti-Monopoly Law of the People’s Republic of China. The payment method of copyright fees with high prepayments will reshape the relevant market competition pattern, and will have a profound impact on the sustainable and healthy development of my country's online music industry." Professor Meng Yanbei, a professor at Renmin University of China Law School and a member of the Expert Advisory Group of the Anti-Monopoly Committee of the State Council It seems that this demonstrates the attitude and determination of China's anti-monopoly law enforcement agencies to resolutely maintain fair competition in the platform economy, and is of symbolic significance to the development of China's anti-monopoly law enforcement.
2 Internet platform companies use their capital advantages to irrationally grab copyrights, and exclusive copyrights become a tool to build market barriers
What is the "exclusive license right" that Tencent has waived?
What is the reasonable limit of "exclusive"?
The copyright of genuine music is the core asset and key resource for the operation and market competition of online music broadcasting platforms.
The emphasis and protection of "copyright" is an important background for all music platforms to start a copyright "competition".
In July 2015, the National Copyright Administration issued the "Notice on Ordering Online Music Service Providers to Stop Unauthorized Dissemination of Musical Works", requiring online music service providers to offline unauthorised dissemination of music works, thereby “strengthening the protection of copyright owners of music works. The protection of rights shall regulate the copyright order of music works distributed on the Internet."
This notice, known as the "most stringent copyright order in history," is an important turning point in the copyright protection of online music platforms.
Since then, the chaos of piracy has been greatly improved, and all major platforms have offline unauthorized music works.
Relying on the nearly monopoly market share of copyright, Tencent Music has an absolute lead in the competition of online music platforms.
According to a survey conducted by the State Administration for Market Regulation, the relevant market shares of Tencent and China Music Group were about 30% and 40% respectively in 2016. Tencent obtained a higher market share by merging with major competitors in the market, and the exclusive music library owned by the entity after the concentration Resources exceed 80%.
"A music platform that has obtained an exclusive license can decide whether to sublicense to a competitor's platform, as well as the price and scope of the sublicense. This results in a certain degree of exclusivity in music copyright resources." Meng Yanbei believes that Tencent has increased online music through exclusive copyright agents. The trading link for the platform to obtain copyrighted content has increased the cost of new access to the platform to obtain legal music content, formed a certain degree of "raw material blockade" on other competitive platforms, and increased market entry barriers.
Exclusive copyright, the original intention is to better protect copyright, better serve and return creators.
It not only exists in the field of online music, but also in many cultural industries.
However, when capital advantage is used to irrationally grab copyright resources, exclusive copyright will evolve into a tool for some platforms to build market barriers, deviating from the original intention.
Industry insiders pointed out that in the short term, exclusive music rights are beneficial to one or two companies and can quickly establish a competitive advantage on the industry track.
But in the long run, it is not a good thing especially for users.
For example, if you have exclusive rights, you have exclusive pricing rights for a certain song. The platform can stipulate that you must buy a member to listen to a certain singer's song, or you must pay for a single song.
Once the "dominant family" and market competition is weak, the leader will also lose the motivation to innovate and improve services.
Through anti-monopoly supervision, the market returns to healthy competition, so that competitors have fair access to copyright resources, and the focus of competition returns to the track of improving service levels and improving user experience. Only by high-level competition can high-quality development be achieved.
Giving up the right of exclusive authorization does not mean that there will be no "exclusive" from now on.
"This case retains the exclusive form for independent musicians and new song debuts, which is conducive to protecting the platform's investment enthusiasm, fostering and enriching local music, and promoting the high-quality development of my country's related cultural industries." Meng Yanbei said.
3 Platform-based Internet companies are prone to forming a “winner takes all” situation due to their operational characteristics, which is a common challenge faced by global anti-monopoly law enforcement agencies
In recent years, "platform anti-monopoly" has become a buzzword, which has not only been frequently mentioned in major conferences of the central government, but has also attracted widespread attention from all walks of life.
On December 24, 2020, the State Administration for Market Regulation announced an antitrust investigation against Alibaba. On April 10, 2021, Alibaba was fined 18.228 billion yuan, causing a market sensation.
On April 26, 2021, the regulatory authorities filed an investigation into Meituan’s alleged monopolistic activities such as “choose one of two”; The group’s acquisition of Mobike failed to declare an investigation in accordance with the law.
On July 7, 2021, the State Administration for Market Regulation issued the "Administrative Punishment Decisions by the State Administration for Market Regulation on 22 Cases of Illegal Concentration of Operators in the Internet Sector", involving Didi, Ali, Tencent, Suning, and Meituan companies , And imposed a fine of 500,000 yuan on the companies involved in the case.
"The purpose of my country's anti-monopoly supervision is to promote industrial development, protect innovation, and better safeguard consumer rights." Shi Jianzhong, vice president of China University of Political Science and Law, said that to build a new development pattern, we pursue high-quality development, monopoly and unfair competition. It will lead to lack of motivation for innovation and lack of vitality in the market, which will ultimately affect the quality of economic development.
Why does the Internet ecology that should be open have "beggar-thy-neighbors" one after another?
“It is generally believed that platform-based Internet companies are a natural monopoly industry.” Sun Yi, deputy director and associate professor of the Virtual Business Department of the School of Economics and Management, University of Chinese Academy of Sciences, said that the monopoly of platform-based Internet companies mainly comes from four aspects: the scale of platform users The resulting network effects, user-centric economies of scope, consumer transfer costs, and data "flywheel effects".
According to Sun Yi's analysis, users are more inclined to join a larger platform. After the platform acquires users, it can provide a variety of services around the needs of users, resulting in a "winner takes all" situation in the market.
Many platform services aggregate the multi-dimensional value of users’ time, energy, credit, and even social relationships. The cost of user transfer is huge. With the development of big data and artificial intelligence technology, both users and third-party service providers will be more and more concerned about the platform. Development dependence, thus forming the monopoly position of the platform.
From an international perspective, developed countries are also paying great attention to the issue of fair competition in the Internet platform market. Anti-monopoly law enforcement and litigation in the field of platform economy have been increasing.
Take the United States as an example. In the past two years, the United States has opened high-profile antitrust investigations on digital platforms, and platform giants such as Google, Facebook, Apple, and Amazon have all been investigated.
In October 2020, the U.S. House of Representatives Antitrust Subcommittee took the lead to release a report entitled "Digital Market Competition Investigation", and announced the results of its 16-month review, particularly emphasizing the market dominance and market dominance of the above four digital platforms. The impact and challenges brought about by commercial activities, and put forward strict supervision recommendations for platform monopoly issues.
On the other hand, the unique characteristics of cross-border competition, “winner takes all”, and high agglomeration in the field of platform economy have also increased the complexity of anti-monopoly supervision, which is also a common challenge faced by global anti-monopoly law enforcement agencies.
It is foreseeable that in the future, strengthening the anti-monopoly supervision of the platform economy will become the norm in major countries and regions around the world.
4 The establishment of Internet antitrust rules will affect Internet giants in the short term, but it is the best choice in the long run
On August 30, the 21st meeting of the Central Committee for Comprehensive Deepening Reform emphasized that strengthening anti-monopoly and in-depth implementation of fair competition policies are inherent requirements for improving the socialist market economic system.
From the strategic perspective of building a new development pattern, promoting high-quality development, and promoting common prosperity, we must promote the formation of a fair and competitive market environment, create a broad development space for various market players, especially small and medium-sized enterprises, and better protect consumers' rights and interests.
In addition to the successive publications and fines issued by the State Administration for Market Regulation, the Ministry of Justice website also recently published the "Regulations on Prohibition of Unfair Competition on the Internet (Draft for Public Comment)", which mainly involves "choosing one of the two" and data "familiarization". ", false transactions, traffic hijacking and other network unfair competition behaviors.
Various measures all show the country's determination to implement anti-monopoly policies, establish a competition mechanism, and maintain fair competition in the market.
It should be noted that the establishment of Internet anti-monopoly rules is not just for the "justice" of competition to attack large enterprises, nor is it for the "efficiency" of competition to harm small, medium and micro enterprises.
This is an inevitable choice for economic and social development to a certain stage in order to maximize social welfare.
"As Internet companies that emerged early in the digital economy era, Tencent, Alibaba, Didi, etc. all rely on their own capital and technological advantages to occupy certain advantages in certain market areas, forming advantages in external economies and economies of scale. This is also China's advantage. The reason for the rapid development of Internet companies.” Pan Helin, executive dean and professor of the Institute of Digital Economy, Zhongnan University of Economics and Law, said that Alipay, WeChat, Taobao, JD, Douyin, Xiaohongshu... these platforms have emerged greatly. It has changed people's lifestyles, enriched people's entertainment forms, and increased entrepreneurial and employment opportunities.
However, if innovators in a monopolistic position abuse their market position, the possibility of monopoly being replaced by a new round of innovation will be reduced or even disappear; monopoly and unfair competition, if not effectively governed, will be allowed to develop recklessly, and the final result will be Will run counter to the goal of common prosperity.
Therefore, when the market cannot adjust and suppress monopoly on its own, the supervisory authorities must promptly take action to correct deviations.
"Anti-monopoly is generally conducive to the development of entrepreneurship and innovation." Pan Helin said that anti-monopoly is mainly aimed at unequal competition in some industries. Anti-monopoly will affect the internal competition pattern of the industry and bring development opportunities to other companies.
At the same time, with the advancement of anti-monopoly, there will be segmented industry competition in many industries. Small and medium-sized enterprises will attract specific users through differentiated strategies and reshape the market structure.
"Platform economy is a new kinetic energy for my country's economic development. The ultimate goal of supervision and law enforcement is to further stimulate the innovation power and development vitality of platform enterprises, achieve sustainable and healthy high-quality development of platform economic norms and innovation, and build new competitive advantages for the country." Yan Bei said.
The Internet means interconnection.
If all major platforms develop in a monopolistic "shell" and no longer face international and future-oriented benign competition, users and consumers will ultimately suffer.
Only by breaking the monopoly can we fully stimulate the innovation vitality and development momentum of market players, and further enhance the overall competitiveness of Chinese enterprises.
In the short term, the introduction of a series of anti-monopoly regulatory measures will have an impact on Internet giants, but in the long term, this will be the best choice.