Abstract:

The rapid development of digital platforms in recent years has played an important role in improving the efficiency of the industrial economy; however, the growth of some leading companies such as Alibaba, while promoting the development of the platform economy, has raised issues of market equality.This study employs a case study of Alibaba, using fruitful hand–collected qualitative materials and financial information, and analyzes the commercial logic of how this online platform became the world's largest digital giant. Then we discuss the legal foundation of the antitrust enforcement that has recently been imposed on this digital giant. Meanwhile, we provide first-hand evidence about the effects of antitrust enforcement on market reactions and financial performance of other online platforms. We argue that there can be tacit collusion among Chinese digital platforms,which provides supportive empirical evidence for the recent antitrust enforcement.In addition, we find that after receiving antitrust punishment, Alibaba has encountered significant declines in profit margins and R&D expenditures, indicating that diminished monopolistic rents discourage the tech giant from engaging in innovative activities. Based on these findings, we argue that antitrust enforcement on digital platforms should be accompanied by a series of policies ensuring platforms' innovation motives, and leading platforms should be encouraged to work with middle–to–small platforms to achieve high–quality development of the digital industry. 

Key words:

 , antitrust regulation, platform economy, competition barriers, tacit collusion

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