Technology

China's antitrust push won’t carry an "explosion of circumstances" towards on-line firms, says Professor

chinas-antitrust-push-wont-carry-an-explosion-of-circumstances-towards-on-line-firms-says-professor

Jack Ma, founder of Alibaba Group, attends the opening ceremony of the 3rd All-China Young Entrepreneurs Summit on September 25, 2020 in Fuzhou, Fujian Province.

Lyu Ming | China News Service via Getty Images

SINGAPORE – According to legal expert Angela Zhang, China's latest antitrust push is unlikely to result in a "sudden explosion of cases" against online platforms.

Their comments came after stocks in Chinese tech giants like Alibaba, Tencent and Meituan became unsettled in November after Beijing released draft rules that first defined what constitutes anti-competitive behavior.

"It's a bit early to say what the next step the government will take, but … at least it signals a trend towards tighter enforcement for these tech companies," said Zhang, associate professor of law and director of the Center for Chinese Law at the University of Hong Kong.

Commenting on the potential impact of the draft anti-monopoly rules, which are currently in a public consultation phase through Nov. 30, Zhang told CNBC's Street Signs Asia on Monday that two factors should be considered.

We shouldn't expect … a sudden explosion of cases against these online platforms.

Angela Zhang

Associate Professor of Law, Center for Chinese Law at the University of Hong Kong

First, such investigations are usually "a long process," and Chinese authorities may take a long time to complete an investigation, Zhang said.

"The last major case you filed against Tetra Pak was almost five years ago," she said, referring to the Swedish packaging company that was fined about $ 97 million by Chinese regulators for antimonopoly practices.

Second, Chinese agencies are "very thin," she added.

"We shouldn't expect … a sudden explosion of cases against these online platforms," ​​said Zhang, as it would consume "a lot of time" and human resources for the government Agencies to bring big cases against the tech giants.

Regarding competitors, the professor said they could pursue their cases in court, although so far no plaintiff has successfully initiated antitrust proceedings against the online platforms. It also remains to "wait and see" how the judges will interpret the issues.

Still, she admitted that many details "still need to be finalized" and it is still not known when the new rules will actually be announced. Even if the new rules are published, they are just "guidelines" that do not change the existing legal framework.

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Katherine Clark