Essay on China’s Tech Giants

Market power is when an organization can raise and maintain its prices above the prevailing level under competition. In most cases, market power reduces the output and loss of economic welfare. China is making fortunes from the big tech giants. Big tech is composed of five large companies, whereby studies show that they are the world’s largest companies involved with the technology. Again, four out of five of these companies have shown a rise to growing in trillion-dollar market capitalization worldwide (Fannin, 2019). Big tech has collaborated with other big companies like big oil industries to make one of the world’s most trading public companies. The big tech revenues continue to increase as the marketing scale of 2019 was at $ 899.2 billion, showing a growth rate of 12.19%. Therefore, it is not easy to monopolize such a firm as it is worth billions of money. However, several factors show that China is making very strict regulations requiring adjustments to ensure fair play.

Antitrust laws are designed in a way that there is fair play in the market competition. The laws promote and protect competitions in all sectors of the economy. Moreover, antitrust laws limit organizations’ market power, thus ensuring that they break from monopolies. Therefore, to ensure an equal play in the market, several regulations are enhanced by the authority to encourage competition. For instance, in the big tech giants, one of the things that have been addressed by Beijing is price discrimination. China has become one of most countries whereby one cannot compete with them. It is easy for a market structure with only one seller dealing with a unique product to charge different customers’ prices. According to Oxford Analytica (2021), regulations should be set to ensure that China was prevented from using its monopolistic powers; therefore, it will face tighter regulations. The big tech giants have made China practice monopolistic behavior since it is the leading country in internet firms. Over the years, it has been reported that e-commerce and other firms were accused of unfair competition (Liao, 2020). For instance, one could get better prices when using an Android phone to shop on e-commerce platforms and get charged expensively when using an iPhone. Therefore, it is very common that vendors will sell at different prices the same product to their clients.

Another thing to consider is about merchants who sign exclusive agreements with the platforms as well as those who have not. Therefore, China has played a monopolist role and demands vendors to transact on only one platform exclusively. Therefore, China should ease some of its regulations, like forcing the merchants and suppliers to choose the sides they want to buy (Segal, 2018). The situation forces the monopolistic organization to issue different prices to their customers, which should not be the case as they are also entitled to make interest. These antitrust regulations are a bit strict to protect market fairness and ensure customers’ interests (Liao, 2020). Therefore, there should not be preferential treatment for merchants who have signed an exclusive agreement with the platforms. In fact, e-commerce needs to invest a lot in infrastructure and show these merchants’ products. Basically, it is beneficial for both the merchants and the platform to sign an exclusive agreement, which will increase the income rate on both sides. Currently, China is pouring a lot of its capital into the United States setups showing that they have a lot of finance (Fannin, 2017). The idea is to encourage the continuous development of the firm as well as that of the economy of the society.

The internet platform should not base their prices according to their customer’s shopping history rates and profiles. The new regulations outlaw these terms and want to eliminate the compulsory collection of user data. Furthermore, people usually register the user with the consent of the compulsory collection of user data. Therefore, the government should address compulsory data collection, considering the merchants (Gao, 2015). The issue here is who owns the data and not necessarily the internet platform to control it. Looking at these points, suppliers and merchants do not fully utilize their rights as the platforms are taking full control of them. It is never fair that some individuals buy commodities at lower prices than others because they are not in the same location. All customers should be treated with an equal measure to make some interest from the sale (Lv & Luo, 2018). For instance, because big tech-based in China is one of the world’s largest companies, they should not change their prices or increase them because they are sure that they have the largest number of buyers. According to (Cave et al., 2019), the use of technology in China should not be the only option that the merchants should deal with. Again, all merchants who have signed an exclusive agreement with the e-platform should receive promotion from them.

In conclusion, all individuals should be treated; equally, no matter the location they are. Big companies should ensure that they all the quoted prices are the same and should not discriminate their customers because they know that they are the sole proprietor. A company should consider all individuals and where they are located, thereby creating a conducive environment for everyone. Individuals taking part in the business should be comfortable working for such a platform whereby a conducive environment is essential. The owner should also observe the data and not the control platform limiting their access to other deals. Therefore, big markets should stop desiring to make fortunes by taking advantage of their customers.

References

Cave, D., Hoffman, S., Joske, A., Ryan, F., & Thomas, E. (2019). Mapping China’s Technology Giants. Australian Strategic Policy Institute.

Fannin, R. (2017). China’s tech giants are pouring billions into US start-ups.

Fannin, R. (2019). Tech titans of China: How china’s tech sector is challenging the world by innovating faster, working harder, and going global. Nicholas Brealey.

Gao, P. (2015). Government in the catching-up of technology innovation: Case of administrative intervention in China. Technological Forecasting and Social Change, 96, 4-14.

Lin, L., & Chin, J. (2017). China’s tech giants have a second job: helping Beijing spy on its people. The Wall Street Journal, 30.

Lv, A., & Luo, T. (2018). Asymmetrical power between Internet giants and users in China. International Journal of Communication, 12, 3877-3895.

Oxford Analytica (2021), “China’s tech giants will face tighter regulation”, Expert Briefings. https://doi.org/10.1108/OXAN-DB258542

Segal, A. (2018). When China Rules the Web: Technology in service of the state. Foreign Aff., 97, 10.