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Secure digital economy, innovation too

China Daily | Updated: 2020-12-16 07:12
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Logos of Alibaba Group and Ant Group are seen during the World Internet Conference in Wuzhen, Zhejiang province, Nov 23, 2020. [Photo/Agencies]

The market regulator has, in line with the Anti-Monopoly Law, fined Alibaba, China Literature and Hive Box 500,000 yuan ($76,290) each for not reporting merger and acquisition deals to the relevant authorities.

The fine is a negligible amount for these companies having market values of more than 100 billion yuan each, but by enforcing the law, the authorities are drawing a red line for enterprises. By investigating such malpractices, the authorities can ensure that the internet does not become a lawless domain, and the past disorderly reign of internet companies will also be brought to an end. It also demonstrates that the strategic layouts or business strategies of internet enterprises should be put within the framework of State laws and regulations.

The internet-based digital sector has become the basis of the new economy. However, internet-linked enterprises that once explored the market innovatively are now doing the opposite. The new business model represented by a platform-based economy has instead led to the formation of monopolies.

The digital economy has, in recent years, become the core driving force for economic growth and will play an irreplaceable role in promoting the post-pandemic economic recovery. However, we should realize that a fair and just market competition environment is the basic premise to ensure the sound and long-term development of the digital economy.

In fact, the development and innovation of the internet economy has benefited from the stimulus of market competition, and the development and buildup of internet giants have also created new drivers of economic development.

Therefore, to ensure the sustainable and healthy development of this sector, the country must create a fair competition market environment that can continue to stimulate enterprises' innovation vitality and development power.

Under such circumstances, how to establish a fair and just order in the new digital economy has become a top priority, and anti-monopoly actions serve as an appropriate weapon to do this.

However, compared with traditional business activities, the internet sector has diversified business models, and created a complex transaction structure and competition ecology, which will bring new challenges for enforcing the anti-monopoly law. This requires that the legislation and law enforcement for the digital economy be made more scientific and prudent, so as not to undermine the innovation and development ability of relevant market players while combating monopoly.

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