Efficiency Defense Against Concentration Control Of Internet Platforms

The concentration of Internet platforms which may have anti-competitive effect is not necessarily vetoed by anti-monopoly authority.Efficiency is a powerful defense.If platforms can prove that the efficiency gains of concentration can offset or exceed the competition damage,they may still obtain the authority’s approval.However,compared with the traditional industries,the efficiency defense of Internet platforms is facing various challenges,including how to identify and demonstrate the efficiency in the context of Internet industry.The first chapter analyses the theoretical basis of efficiency defense of Internet platforms.In terms of legal theory,efficiency defense is an important embodiment of the rule of reason.For Internet platforms,the relationship between "big" and "good" is not clear at a glance.Competition impact analysis shall weigh the positive and negative effects of concentration at the same time.Efficiency defense gives Internet platforms as much space as possible to be free from anti-monopoly administrative interference,which is the extension of the concept of modesty in the field of economic law.Platforms have the right to raise efficiency defense,but shall be subject to the review of antimonopoly authority.Behind this is the balance among platforms’ interests,consumers’ interests and competition order.Efficiency defense is not boundless.Efficiency must be legitimate and concentration must be an essential condition to achieve efficiency,which is the reflection of the principle of proportionality.In terms of economic basis,in the Internet industry with innovation as the king,the concentration of platforms pays special attention to dynamic efficiency.On the issue of efficiency distribution,through the comparison among different welfare standards,we can find that consumer welfare standard is a better option in the Internet era.The second chapter puts forward the dilemma of applying the efficiency defense in Internet era.First of all,the legal norms of efficiency defense are ambiguous.The connotation of efficiency is unclear,and its relationship with "technology improvement","industry development","positive impact on competition" and "social public interest" is also unclear.The position of efficiency defense is also unclear,and its relationship with the exemption system of concentration review needs to be clarified.Secondly,compared with traditional industries,it is not easy to evaluate and identify the dynamic efficiency of Internet platforms concentration.The application of efficiency defense is also affected by the complex characteristics of the two-sided market.The third chapter analyzes the substantive standards of efficiency defense.First of all,we need to clarify the concept of efficiency and the position of defense.The "efficiency" refers to platforms’ own efficiency at the micro level,but the efficiency also promotes the realization of the macro benefit invisibly.The efficiency defense in China adopts the mixed analysis mode.Efficiency is not only an important reference factor in the review and evaluation process of the authority,but also a means for platforms to claim to offset the anti-competition effect.Secondly,we need to identify the efficiency in the context of the Internet era.The static efficiency is mainly reflected in the cost savings of the platforms after concentration,while the dynamic efficiency mainly refers to various innovation achieved.The evaluation of dynamic efficiency should still pay attention to the possibility of quantification.The platforms need to provide documents within the normal business scope to prove the effectiveness of dynamic efficiency,and the authority needs to conduct a detailed review of the claimed dynamic efficiency,especially the extent and timing of innovation possibilities.Finally,it is necessary to set up strict standards to prevent operators from exaggerating the efficiency that concentration may bring.Specifically,efficiency should be enough to offset the anticompetitive effect.Efficiency must be unique to concentration,verifiable and timely and can be passed to consumers.It is noteworthy that efficiency defense is not applicable to concentration that leads to monopoly,which is the bottom line for maintaining the order of competition.The fourth chapter discusses the supporting procedures.Firstly,platforms can put forward or reiterate efficiency claims in the negotiation,notification,review and even relief stages,which helps the authority to minimize law enforcement errors.Secondly,due to the fact that platforms have more information about the concentration than the authority,the burden of proof is imposed on platforms,and they are required to prove the claimed efficiency to a high degree of probability.Thirdly,the anti-monopoly authority are required to listen to the opinions of stakeholders as much as possible and ensure the openness of the procedures during the review process,which is the requirement of justice in law enforcement.Finally,if the anti-monopoly authority do not prohibit concentration,it is still necessary to carry out tracking assessment to verify the impact of concentration,which not only helps to correct the biased decision as soon as possible,but also accumulates experience for subsequent law enforcement.