What Should We Do about E-Commerce Platform Giants? —The Antitrust and Regulatory Approaches in the US, EU, China, and Japan

This paper focuses on one of the most important digital platform sectors—E-commerce—addressing the antitrust enforcement, comparing it with new regulatory approaches, learning from experiences in the US, EU, China, and Japan. E-commerce is shown to have distinct characteristics, as compared to other platform sectors: in particular, prevalence of multihoming and product differentiation. As a result, e-commerce market shares in the US, China and Japan all have shown no tendency toward monopoly. It is, therefore, misguided to adopt ex-ante fixed regulation on digital platforms as a whole, as now envisaged by the EU Digital Markets Act proposal. Instead, competition in e-commerce should be protected by competition-law enforcement, which has the merit of a flexible case-by-case approach. Focus by competition authorities should be put on exclusionary practices of e-commerce giants, most pernicious of which is exclusive dealing (or “pick one from two” practice), since this practice destroys multi-home nature of e-commerce. A striking example of this is a crackdown recently conducted by the Chinese competition authority against Alibaba and Tencent. On the other hand, forced data sharing, as well as interoperability, has recently received particular attention as public policy aimed at ameliorating competition in digital platforms. However, for e-commerce, such forceful intervention leads to negative consequences of robbing enterprises of incentives to analyze data and innovate. Instead, competition-law enforcement is called for, although competition law jurisprudence on refusal-to-deal does not lead to enforcement on e-commerce giants. Meanwhile, exploitative abuse (or superior-bargaining-position) regulation has attracted increasing attention, in order to protect suppliers from abuse by e-commerce giants. This regulation needs exacting application, in order to achieve transparency in finding exploitation, and then needs to weigh the need to protect suppliers against benefits to consumers realized through efficiency in e-commerce