The sharing economy and China’s antimonopoly law: from the Didi case to regulatory challenges*

Abstract

The sharing economy is a new industrial model that has been booming in China over the past decade. China’s antimonopoly law, however, has stayed relatively dormant while this innovative business has been expanding. For this article, I have chosen Didi Chuxing (Didi), the largest online ride-hailing service provider in the Chinese market, as my research subject. Didi’s rapid development mirrors the sharing economy’s prosperity in China as well as challenges faced by antimonopoly law. Based on my observation of Didi’s business expansion, I point out three major anticompetitive concerns: predatory pricing, abuse of a dominant position, and undue interference by government authorities. This article concludes by suggesting three ways to address these concerns. Firstly, it suggests strengthening the antimonopoly law’s core value of efficiency, which could help law enforcers escape from the confinement of traditional antitrust concepts and adopt more flexible and efficient approaches to analyse companies’ behaviours. Secondly, it suggests adjusting the merger control thresholds and developing more flexible rules to review behaviours related to a dominant position in the sharing economy. Thirdly, the Fair Competition Review System is expected to be an effective mechanism to prevent governments from unduly interfering in competition in the sharing economy.