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Xiao Mengli | From safe haven to gatekeeper: shifting and observing the platform governance paradigm
2023-12-11 [author] Xiao Mengli preview:

[author]Xiao Mengli


From safe haven to gatekeeper: shifting and observing the platform governance paradigm

Xiao Mengli

Lecturer at the Law School of East China University of Science and Technology and Deputy Director of the Research Centre for Sociology of Law of East China University of Science and Technology. Doctor in Jurisprudence from Shanghai Jiaotong University. 

Abstract: In the year 2022, internet platforms have experienced the booming development of new industries such as live broadcasting platforms and short video platforms on the one hand, and the incident of DiDi's astronomical fines on the other hand highlights that the platforms are subject to stronger and stronger government supervision. The unrestrained power of platforms is the "Leviathan" of the new era, and the relationship between platform power and government power is complex and interactive. The traditional governance paradigm needs to be updated, and mechanisms such as personal information protection, cybersecurity, and data security review have become important tools for platform governance. Regulatory concepts need to balance the conflicting values of data security and free flow, and the principle of proportionality to balance the potential conflicts between public, personal and commercial interests. In the field of normative application, there are cases of failure of interpretation, and certain new types of platforms do not conform to the existing standard definitions, which require additional interpretation of the conceptual scope of Internet platforms. The field of platform governance shows a trend of gradually increasing responsibility, and the gatekeeper theory is replacing the principle of safe harbour as the new basic norm, and China's interpretation of the responsibility of the main body of the platform provides a new mirror for this field.

Keywords: platforms; platform governance; gatekeepers; principal responsibility; data security

The rapid development of information technology and the transformation and upgrading of the economic model have given rise to third-party e-commerce platforms that provide virtual business premises and services such as transaction aggregation for both parties to a transaction. In the era of high assetisation of information resources, platforms actually build a fast trading channel between "production and marketing consumers" and Internet merchants. Large-scale Internet platforms have gradually gained a dominant position by virtue of their scale effect, controlling the hub of information dissemination and interaction and further re-centring cyberspace. Platforms have also gradually developed from a single transaction channel into a systematic self-regulatory system, including the construction of the basic information environment at the front, the operation of the platform in the middle, and the integration of the user data processing at the end into a complete "ecosystem". Due to the lagging nature of the law and the rapidity with which platforms have explored their "tentacles", the ever-expanding number of platforms has given rise to inter-subjective conflicts of interest and infringement of rights, and has continued to explore the high-powered regulatory realm provided by the government, thus triggering a number of responses from the state, including moulding and incorporation.

Internet platforms are experiencing a rapid rise and over-speed development, invading the daily life of every individual with a sweeping force. Platform enterprises are characterized by direct and indirect network effects to attract transaction volume, efficient search and matching ability to reduce transaction costs, and dual attributes of enterprise and market. Internet platform is the latest stage in the evolution of platform enterprises, which has both the common attributes of platform enterprises and new features in the Internet environment. On the one hand, Internet platforms are not restricted by physical boundaries and have technological architectural advantages, which bring great difficulties to the government-led regulation in the traditional sense. On the other hand, the Internet platform self-constructed a normative closed loop, for the main body of the platform transactions have regulatory effect. The self-regulation of platform enterprises means that "the regulated subject designs its own regulatory rules and implements them on its own". Self-regulation is a "means of enforcing private authority, an endeavour to design and enforce its own rules" in the context of a legal vacuum or a market need. Self-regulation by platform firms may generate technological and systemic risks, algorithmic manipulation risks, and power spillover risks. This is where the regulation of self-regulation by platform firms becomes particularly important, requiring opportunistic and timely government regulation and judicial intervention.

1.The governance logic behind the astronomical fines imposed on platforms

General Secretary Xi Jinping pointed out that "the development of China's platform economy is in a critical period, and it is necessary to focus on the long term, take into account the current situation, make up for shortcomings, strengthen weaknesses, create an innovative environment, resolve outstanding contradictions and problems, and promote the standardized, healthy and sustainable development of the platform economy". In recent years, the status and role of China's platform economy in the overall situation of economic and social development have become increasingly prominent, and the overall trend of development has been favourable and positive, but there are also problems related to insufficient economic development and the endangerment of data security.

1.1 The beginning and end of the sky-high fines imposed on DiDi

Unrestrained platform power is the "Leviathan" of the new era. Throughout the whole year of 2022, the most eye-catching case in the field of internet platforms must be the case of DiDi being punished with a fine of 8.026 billion yuan and involved in national security review. This not only shows the deep connection and inseparability of the "platform-data-algorithm" troika, but also shows that platform data not only reflects user behaviour, but also reflects the depth of the platform's intake, until it affects national security. General Secretary Xi Jinping pointed out that "network security has a close relationship with many other aspects of national security, as it affects the whole body."

Penalty results and reasons for penalties imposed on DiDi

Cyberspace Administration of China officially announced that it has imposed a fine of RMB 8.026 billion on DiDi, as well as a fine of RMB 1 million each on DiDi's chairman Cheng Wei and president Liu Qing.

DiDi has 16 facts of offences, mainly related to the following eight areas:

1. Illegally collecting 11,963,900 pieces of screenshot information from users' mobile phone albums;

2. Excessive collection of 8.323 billion pieces of user clipboard information and application list information;

3. Excessive collection of 107 million pieces of passenger facial recognition information, 53,509,200 pieces of age group information, 16,335,600 pieces of occupational information, 1,382,900 pieces of information on family relationships, and 153 million pieces of information on "home" and "company" taxi addresses;

4. Excessive collection of 167 million pieces of precise location (latitude and longitude) information from passengers when evaluating chauffeur services, when the app is running in the background, and when the mobile phone is connected to the Orange Vision Recorder device;

5. Excessive collection of 142,900 pieces of information on drivers' academic qualifications and storage of 57,802,600 pieces of information on drivers' identity card numbers in clear text;

6. Analysed 53,976 million pieces of information on passengers' travel intentions, 1,538 million pieces of information on resident cities, and 304 million pieces of information on off-site business/ off-site travel without explicitly informing passengers;

7. Frequent requests for unrelated "phone privileges" when passengers use the hitchhiking service;

8. Failure to accurately and clearly state the purpose of processing 19 items of personal information, including user equipment information.

We first need to trace back to the beginning and end of the incident of the astronomical price of DiDi, which begins with the introduction of the "Data Security Law of the People's Republic of China" (hereinafter referred to as the "Data Security Law") and DiDi’s "lightening speed listing" in the United States. 10 June 2021, China has just announced the "Data Security Law". 30 June 2021, DiDi in the The New York Stock Exchange in the United States quietly listed. Described in media language, there was no bell ringing, no press release, and no overwhelming publicity for the listing of DiDi. The United States, New York time on 10 June, DiDi to the United States Securities and Exchange Commission (SEC) submitted a prospectus, applying for listing on the New York Stock Exchange. During the day, the State promulgated the "Data Security Law", and at night, DiDi overnight to the SEC to "surrender" ——the prospectus.From the submission of the prospectus on the 10th to the successful listing on the 30th, only 20 days apart, DiDi has achieved "light speed listing".

Next, the national regulators struck hard and carried out a series of rapid review initiatives on DiDi. 2 July, Cybersecurity Review Office implemented a network security review of DiDi based on the National Security Law and the Network Security Law, and suspended the registration of new users in order to prevent the expansion of risks; 4 July, Cyberspace Administration of China issued a further circular: The result of the review is that the APP of "DiDi Chuxing" has serious illegal collection and use of personal information, requiring the removal of the APP; 9 July, Cyberspace Administration of China required the removal of 25 apps such as "DiDi Enterprise Edition", and all DiDi's software; 10 July, Cyberspace Administration of China solicited public opinions on the revised "Measures for Cybersecurity Review", requiring operators who have more than 1 million users' personal information to list abroad must report to the Cybersecurity Review Office for cybersecurity review; 16 July, Cyberspace Administration of China, together with Ministry of Public Security, Ministry of State Security, Ministry of Natural Resources, Ministry of Transport, State Administration of Taxation, State Administration for Maket Regulation, jointly entered Didi Chuxing Technology Company to conduct a network security review.

1.2 The picture of power in the Didi incident

Didi's listing at the speed of light in the United States is naturally inseparable from its business situation, and it also shows the delicate relationship between platform power and state power, and even the wrestling between different countries fighting for data sovereignty and platform development. Didi's net profit in the three years of 2018/2019/2020 were: -10.5 billion, -9.7 billion, and -10.6 billion. Whether it is a Hong Kong stock or an A-share market, it is impossible to give it a "pass" to be listed. Since 2012, the U.S. Securities and Exchange Commission (SEC) has required the Big Four accounting firms to submit audit working papers (including all user data, all employees, all meeting minutes, all correspondence and email records, and all procedural forms) of all U.S.-listed Chinese companies. Correspondingly, China's China Securities Regulatory Commission (CSRC) has responded strongly: the SEC will never be allowed to take away any audit working papers of any Chinese company.

By peeling back the cocoon, it can be found that there are multiple power struggles in Didi's listing in the United States. The first is the conflict between the platform's self-regulatory power and the government's formal regulatory power. It is generally believed that the choice of listing is the scope of platform autonomy, and data supervision is also in the field of daily management of the platform. The self-regulation of the platform can efficiently respond to the decentralization of knowledge and control, and realize low-cost governance under self-organization [Peng Lan, Internet Governance from the Perspective of Self-Organization and Network Governance Theory", Social Science Front, No. 4, 2017, pp. 168-175. ]。 As Derrida said, the problems of today's society are more reflected in the phenomenon of "capillary power", which depends on the development of science and technology and is diffused in the social organism. In response to the possible overextension of this power system and the loss of control, there are two very different ways to respond to it: direct intervention by the state or constitutionalization within it [see [De] Gonta Toyibna, trans. Lu Yufeng, Fragments of the Constitution, Beijing, Central Compilation and Publishing House, 2016, pp. 99-100]. ]。 However, as the Didi case demonstrates, the self-regulation of platform companies may also violate or reach the traditional realm of government regulation, giving rise to new governance risks. Didi's insistence on going public in the U.S. may potentially expose its own audit working papers rather than its mere audit conclusions, which could lead to national security concerns. In this case, the exercise of autonomous power by the platform may undermine the stability of the underlying legal and regulatory framework [See Katz, Vanessa. "Regulating the Sharing Economy." Berkeley Tech. LJ, 30 (2015): 1067.]。

The two-dimensional power of platform enterprises forms a picture of the intersection of light and dark: if the right to punish platform rules is a kind of "manifestation" of the expression of the power of platform enterprises, then the "data right" is more like a flexible "microtechnique". Most of the time, this new type of "data power" is not manifested as a kind of "suppression" and "censorship" in the traditional sense. The data power of platform enterprises is both control and influence; It is both inducing and exciting. Here we can recall the five questions about democracy: "What power do you have?" Where did you get these powers? In whose interest are you exercising these powers? To whom do you be accountable? How do we get rid of your influence? [Jason Sadowsky, translated by Xu Qi: Excessive Intelligence, Beijing, China Translation Publishing House, 2022 edition, p. 20.] ]

Platform operators promote and observe user interactions, and provide information services to help match one user with another. In this process, platform companies gradually have the advantages of data collection, use and control. As Foucault put it, it is important to "in what form does power permeate the most subtle and individualized acts, through what channels and along what discourse ultimately permeates the most subtle and individualized acts, the path it takes to rare or almost imperceptible forms of desire, and how it penetrates and controls everyday pleasures" [Michel Foucault, History of Sexual Experience, Shanghai, Shanghai Century Publishing Group, 2002 edition, p. 9]. ]。 The initial design of the Internet was based on a decentralized and open structure and anonymous interactive activities. However, with advances in technology, platform companies have been able to track and correlate the behavior of billions of users on websites without consumers' knowledge or explicit consent.

The private power of the platform may conflict with the public power of the state, which is more common in the power conflict of cross-border data. On the one hand, there are many ways to coexist between the private power of the platform and the public power of the state: there may be the erosion of the traditional scope of the government's power by the platform power, the compromise and active seeking of embedding by the government power to the platform power, and the co-optation of the platform power by the state power [Xiao Mengli, "Risk and Accountability Analysis of the Self-regulation of Trading Platforms", Ph.D. dissertation, Shanghai Jiao Tong University, 2019. ]。 On the other hand, the virtuality of cyberspace has recreated the concept of sovereign states, and data sovereignty has come into being. Some scholars believe that it can be divided into hard data sovereignty and soft data sovereignty, the former involves the scope of traditional sovereign independence, equality and jurisdiction, and the latter involves technical standards, data control and multilateral negotiated governance [Ran Congjing, Liu Yan, "The Theoretical Genealogy of Data Sovereignty", Journal of Wuhan University (Philosophy and Social Science Edition), Vol. 75, No. 6, 2022, pp. 19-20. ]。 The rivalry between the CSRC (China Securities Regulatory Commission) and the SEC (Securities and Exchange Commission) can also be seen in the Didi case.

Coincidentally, Meta outside the region may be forced to withdraw from Europe due to data sharing disputes. According to foreign media reports, Meta was blocked by negotiations with the EU on privacy rules, and in February, Facebook's parent company Meta again threatened to withdraw Facebook and Instagram from the EU at the same time. The EU's concerns include that under the current data transfer treaty, agencies such as the US National Security Agency could require these multinational internet companies to provide European user data. Meta's statement was seen as an overt "threat", while the European Union said it would not relax its standards and mentioned that it was stepping up negotiations with the United States to update the treaty. [Sina Technology: The battle for data sovereignty reflected behind Meta's threat to withdraw from Europe.https://finance.sina.com.cn/tech/2022-03-04/doc-imcwipih6495452.shtml]

1.3 The collusion between the sky-high fines and the platform's data security

What is more sensitive in the Didi incident is the particularity of the map data: the map orientation data we use daily has been encrypted, and there is a certain deviation between it and the real latitude and longitude [for example, AutoNavi Map, Tencent Map and Google China use the GCJ-02 coordinate system, and Baidu Map uses the BD-09 coordinate system, and there may be tens to hundreds of meters of offset between different coordinate systems]. ], but it does not affect the use, which is also a common practice in countries around the world. In 2015, Didi Media Research Institute and Xinhuanet New Media Center released a "Big Data Revealed: Overtime Competition of Ministries and Commissions on High Temperature Days". For the Didi platform, which has this kind of data, data security is national security. Platform enterprises are closely related to the scope economy: the scope economy can more perfectly match users on different sides of the platform market. The economies of scope of platform enterprises include at least two meanings: first, the efficiency of a larger database is much higher than that of a smaller database; Second, interconnected databases can provide more in-depth information and are less expensive to process than stand-alone databases, which means that platforms with more personal data can provide users with a better and more convenient experience. Economies of scope support the idea that the higher the degree of data integration, the better the effect. This leads to a paradox: in the long chain of data generation, collection, analysis, transaction, and use, should platform companies be encouraged to conduct secret and continuous data transactions to obtain the most complete "portrait" of a specific user group, so as to provide more targeted services? Or should platform companies be restricted from further expanding their databases through mergers, and strictly adhere to the rules on the second-hand use of data?

The DSL's stance is based on national security and the concept of giving priority to public welfare. The legislative purpose of the Data Security Law is mainly in two aspects: first, to regulate data security processing activities and strengthen legal protection of data security; The second is to promote the free flow of data to create more economic value. Particular attention should be paid to the categorization of special data security (undisclosed government information, large populations, genetic health, geography, mineral resources,and so on.) and general data security. The DSL follows two principles: first, the conflict between the value of data security and the value of freedom should be reconciled under the principle of balance; Second, under the principle of proportionality, it is necessary to balance the conflict between public interests and individual interests.

Cross-border data is an extremely important part of data security, which mainly involves four theories: data without borders, data sovereignty, data free trade, and human rights protection across data borders. However, in practice, these four theories have their own weaknesses, and the network without borders cannot be launched without data without borders, "absolute data without borders has proved to be unrealistic, and the protection of personal rights and interests, property attributes and national security attached to data will inevitably trigger supervision by various countries." Absolute data sovereignty is also impossible to achieve in the face of data particularity, and data is naturally liquid and non-competitive. The theory of free trade in data has its plausibility, but it is necessarily bound by the laws of sovereign states and their people. [Ding Xiaodong, "Legal Reflection and Institutional Reconstruction of Cross-border Data Flow", Administrative Law Research, No. 1, 2023, pp. 62-77.] Therefore, some scholars advocate that on the basis of the controversy over the theory of data sovereignty, digital security sovereignty should be used as an alternative theory, with the risk regulation path as the basis15 and the principle of balance as the guide.

On May 23, 2022, Didi officially announced its delisting from the New York Stock Exchange, and on June 2, 2022, Didi officially submitted its delisting application. On September 1, 2022, the Cyberspace Administration of China (CAC) announced the Measures for the Security Assessment of Cross-border Data Transfers (hereinafter referred to as the "Assessment Measures") officially came into effect. The Assessment Measures echo several principled provisions of the Cybersecurity Law of the People's Republic of China, the Data Security Law of the People's Republic of China and the Personal Information Protection Law of the People's Republic of China, and refine the specific provisions on data export from different perspectives in the Cybersecurity Review Measures and the Provisions on Standard Contracts for Cross-border Transfer of Personal Information (Draft for Comments). The Assessment Measures clearly point out that with the vigorous development of the digital economy, cross-border data activities are becoming more and more frequent, and the demand for data processors to export data is growing rapidly. Clarifying the specific provisions on the security assessment of cross-border data transfer is necessary to promote the healthy development of the digital economy, prevent and resolve cross-border data security risks, safeguard national security and social public interests, and protect the rights and interests of personal information. The Assessment Measures stipulate the scope, conditions and procedures for the security assessment of data export, and provide specific guidance for the security assessment of data export. The security assessment of data export adheres to the principles of combining prior assessment and continuous supervision, and combining risk self-assessment with security assessment ["Cyberspace China" WeChat official account: "Measures for the Security Assessment of Data Export Issued by the Cyberspace Administration of China", 2022-07-08, http://www.szzg.gov.cn/2021/xwzx/qwfb/202207/t20220708_5950113.htm]. The Assessment Measures stipulate the circumstances under which a security assessment for data export shall be applied: (1) data processors provide important data overseas, (2) critical information infrastructure operators and data processors that process the personal information of more than 1 million people provide personal information overseas, (3) data processors that have provided personal information of 100,000 people or sensitive personal information of 10,000 people overseas since January 1 of the previous year, and (4) other circumstances requiring the declaration of security assessment for data export as stipulated by the CAC. Article 19 of the Assessment Measures further stipulates that "important data as used in these Measures refers to data that may endanger national security, economic operation, social stability, public health and safety, once it has been tampered with, destroyed, leaked, illegally obtained or used. ”]。 As General Secretary Xi Jinping has pointed out: "Cybersecurity is open rather than closed. Only by basing ourselves on an open environment, strengthening foreign exchanges, cooperation, interaction, and games, and absorbing advanced technologies, will the level of network security continue to improve. (Repeated with 17 quotes)

1.4 More platforms are caught in data security reviews

The relevant person in charge of the Cybersecurity Review Office said that in order to prevent national data security risks, safeguard national security, and protect the public interest, in accordance with the "National Security Law", "Cybersecurity Law", "Data Security Law", and in accordance with the "Cybersecurity Review Measures", on June 23, 2022, the Cybersecurity Review Office interviewed the person in charge of Tongfang CNKI (Beijing) Technology Co., Ltd. and announced the launch of a cybersecurity review of CNKI. It is reported that CNKI has a large amount of personal information and important data related to key industries such as national defense, industry, telecommunications, transportation, natural resources, health, and finance, as well as sensitive information such as China's major projects, important scientific and technological achievements, and key technology trends.

The "14th Five-Year Plan" National Informatization Plan (hereinafter referred to as the "Informatization Plan") has a special chapter on "Accelerating Digital Development and Building a Digital China", and makes clear arrangements for accelerating the construction of a digital economy, a digital society, and a digital government, and creating a good digital ecosystem. General Secretary Xi Jinping pointed out: "Cyber security affects national security and is closely related to security in many other aspects. The "Informatization Plan" emphasizes the strengthening of the platform governance system, including "improving the mechanism for reporting, handling and disclosing illegal content, guiding platform enterprises to timely and proactively disclose the self-inspection and disposal of illegal content, and timely warning and investigation of major risks and hidden dangers", which provides a guide for platform enterprises to investigate risks and hidden dangers in advance.

General Secretary Xi Jinping pointed out: "The essence of network security is confrontation, and the essence of confrontation lies in the ability to compete at both offensive and defensive ends. On the one hand, China continues to develop new network security protection technologies and continuously strengthen the construction of network security guarantee systems, and on the other hand, it actively carries out the construction of network security laws, regulations and rules and regulations, and a number of laws and regulations in the field of network security have been promulgated one after another, such as the Data Security Law of the People's Republic of China, the Personal Information Protection Law of the People's Republic of China, the Regulations on the Security Protection of Critical Information Infrastructure, and the Measures for Cybersecurity Review. In order to further strengthen network security assurance, the "Informatization Plan" proposes to "strengthen joint research on core network security technologies, carry out research on key technologies such as advanced threat protection, situational awareness, monitoring and early warning, and establish a safe and controllable network security software and hardware protection system".

2.The paradigm change of platform liability is not sufficient with traditional regulations

2.1The governance dilemma of new platforms such as live broadcast platforms and short videos

Live streaming is a new sales operation channel that began in 2016. Taobao defines 2019 as the "first year of China's e-commerce live broadcast", and in 2021, the scale of live broadcast e-commerce users will be 464 million, and the industry market size will reach 184.442 billion yuan [China Performance Industry Association, "China Online Performance (Live Broadcast) Industry Development Report (2021-2022)", 2022-8-10.]. "Live e-commerce", "social e-commerce", and "cross-border e-commerce" have become the new "troika" of the dual-cycle economy [Xinhuanet, draft planning outline: forming a strong domestic market and building a new development pattern, http://www.xinhuanet.com/politics/2021-03/05/c_1127172953.htmbaike]]. The live broadcast industry has realized the reconstruction of "people, goods, and venues", the dual coupling of economic exchange and social exchange, and the immersive community presence [Han Xinyuan, "Research on the Theory and Governance of Live Streaming", Science and Technology and Law (Chinese and English), No. 1, 2022, pp. 63-66. ]。 Everything can be broadcast live, and the problems behind everyone can bring goods are frequent, and a series of problems such as false publicity, fake and shoddy products, data adulteration, high return rate, and difficulty in protecting rights have emerged one after another. In these infringements, is it to punish the anchor personally or the enterprise? For example, in 2020, the "Xinxuan Company's live broadcast with fake bird's nest incident" selectively applied the Anti-Unfair Competition Law. Focus on punishing enterprises rather than individual anchors. More importantly, what kind of liability does the live-streaming platform bear, and whether it strictly complies with the relevant definition of an e-commerce platform under Article 9, Paragraph 2 of the E-Commerce Law?

2.2 The merger and compatibility of new platform governance and e-commerce platform governance

For a long period of time, only those who are characterized as e-commerce platforms are required to bear relevant legal liabilities, and the definition of e-commerce platforms needs to strictly meet the definition of "a legal person or unincorporated organization that provides online business premises, transaction matchmaking, information release and other services for two or more parties to a transaction in e-commerce, so that two or more parties to a transaction can independently carry out transaction activities". This situation makes live broadcast platforms and short video platforms even directly start traffic operations or live streaming goods, all looking forward to the qualitative trend of "escaping (e-commerce) platforms". As some senior scholars insist, "the E-commerce Law is essentially an 'e-commerce platform liability law'" [Xue Jun, "<电子商务法>The Connotation of Platform Responsibility and Its Application Model", Legal Science (Journal of Northwest University of Political Science and Law), No. 1, 2023, pp. 57-68. ]

In practice, there is often a divergence between theory and practice, and sales behavior on new platforms is often not so "standard". For example, when the anchor only conducts publicity, introduction, or evaluation, and only provides a link that can be jumped, it may not be recognized as an e-commerce platform due to the lack of closed-loop transactions. In this case, if the consumer purchases a product that does not conform to the description during the live broadcast, the live broadcast platform is not the consumer's counterpart, and whether it does not need to bear the relevant liability. Correspondingly, the shopping links provided on Douyin and the shopping mini programs on the WeChat platform are also facing difficulties in identifying them as e-commerce platforms. After all, Douyin and WeChat provide huge traffic to merchants on the platform. Infringement cases on short video platforms are also frequent. What needs to be thought about by extension is, what is the connotation of platform responsibility, whether it needs to start anew or make minor repairs to the original regulatory system? Can the platform governance method in the Web3.0 era, which was previously iterated within the Internet, still operate effectively?

At this point, it is necessary to consider whether to examine the change of platform liability by means of functional equivalence or adjudication on a case-by-case basis. For example, according to paragraph 2 of Article 7 of the Measures for the Supervision and Administration of Online Transactions, the competent authorities have adopted the idea of determining "functional equivalence", that is, if the four elements specified in the E-Commerce Law are met at the same time, it can be deemed to have provided substantive e-commerce platform services.

How to determine the "notice-takedown" principle for repeated infringement of small video platforms?

Hangzhou Internet Court held a public hearing and pronounced judgement on the case of the dispute between the plaintiff Beijing ByteDance Network Technology Co., Ltd. (hereinafter referred to as "ByteDance Company"), the plaintiff Zhejiang Today Toutiao Technology Co., Ltd. (hereinafter referred to as "Today Toutiao Company"), and the defendant, a technical service company, over the infringement of the right of information network dissemination of works.

The court held that a video platform operated by the defendant (hereinafter referred to as "Platform A"), in the event that the defendant should know that the users were using the information storage space provided by the defendant to infringe on the right to disseminate audiovisual works through the information network, although it had taken the measure of "notification and deletion", it had failed to "effectively stop the infringement", and that it should bear the civil liability of immediately stopping the infringement of the 38 infringing videos provided by the users of Platform A and paying compensation for the economic losses and reasonable expenses for the defence of the rights in the amount of RMB 300,000 yuan.

Overview of the case

► The plaintiffs alleged:

It is authorized by the right holder to enjoy the right of information network dissemination and the right to defend its original video works under the accounts of "Rural Brother Four" in Today Toutiao and Watermelon Video in accordance with the law.

The "Rural Brother Four" account on Platform A and the "Rural Brother Four" account on Watermelon Video have the same nickname and avatar, and disseminate a large number of the above-mentioned original video works, attracting many users to watch, download and share the infringing videos on Platform A online.

Since July 2021, the Plaintiffs have sent more than 40 letters to the Defendant, requesting the Defendant to delete the infringing videos and take necessary measures "to effectively stop the infringement" in order to stop the continuous infringement. However, the Defendants have neither removed the infringing videos in a timely manner nor taken any necessary measures, resulting in the infringing accounts continuing to post infringing videos.

► The defendant argued:

Firstly, it was not clear whether the content of the video in question was an audiovisual work or an audio-visual recording;

Secondly, the defendant is a network service provider, only provides information storage space services, there is no fault for the network users to upload the infringing works, does not constitute infringement, and has taken the necessary measures in a timely manner to "notify -delete", without the need to bear the responsibility for compensation.

► Points for Judgement:

First, there may be different perspectives of originality judgement between different types of works as well as various classified works of the same type of work, and the originality of documentary audiovisual works should be considered in terms of the selection of materials, filming, screen arrangement, etc. [Firstly, the selection of materials. The contents of documentary audiovisual works are all derived from specific characters and events in real life, and the producer's originality of labour is mainly reflected in how to select and use various realistic materials.

Secondly, the filming of the material. The commonality of audiovisual works lies in the originality reflected in the upper and lower articulation of the screen, but in the actual shooting process, what kind of angle and technique is used for shooting, and what kind of visual experience is brought to the audience, there are personalised differences.

Thirdly, the selection and arrangement of the shooting images. The final expression of an audiovisual work is a continuous picture, even if it is the same material and the same shooting picture, the producer adopts different ways to select and arrange it, which may form different audiovisual works].

Second, the key to determine whether the network service provider is liable for indirect infringement lies in the subjective perception of the objective infringement facts. As to whether the network service provider subjectively knows or should know, the judgement can be based on the two levels of "obvious perception" and "repeated infringement" standards.

Third, necessary measures must ultimately achieve the practical effect of "being able to effectively stop the infringement".

Fourth, for different forms of infringement, there should be a gradual progression from "minor to major" depending on the degree of infringement. For a single infringement, the necessary measures of "notification + deletion" may be able to effectively stop the infringement. However, for repeated infringement, network service providers have a higher duty of care and should take preventive measures.

The above cases of repeated infringement by short video platforms are of typical significance, which help to clarify the boundaries of the duty of care of short video platforms in respect of "repeated infringement", and clarify the scope of the subjective fault of short video platforms that they "knew or should have known" in a typological manner, and at the same time, explain the connotation of "necessary measures".

2.3 Is the safe haven principle obsolete?

From its establishment on 9 September 2018 to 30 November 2022, Beijing Internet Court accepted 4,560 online music copyright disputes and concluded 4,046 cases. The top ten subjects in terms of the volume of sued cases were all platform operators, accounting for more than half of the total number of cases received. Infringement modes mainly include: unauthorized cover songs by webcasters during live broadcasts; playing songs as background music; unauthorized cover songs in short videos; or unauthorized use of other people's songs as background music. The trial of infringement cases in the field of live broadcasting and short videos is more likely to arouse social concern: The trial of the Music Copyright Society of China v. Douyu live broadcasting case triggered a topic volume of 150 million; The case of the advertisement short video of the Yinwei Company v. Chunyu Company was called by the media as the first case of the infringement of the MCN commercial music, which triggered the attention of all circles to the chaotic phenomenon of the infringement of the background music of the short videos.

The "safe harbour" principle is derived from the United States regulatory philosophy and is characterized by the red flag principle. The core is the "notification - deletion" principle and the technology-neutral regulatory stance.[The "notification -deletion" principle was first established in the United States in 1998 under the the Digital Millennium Copyright Act (hereinafter referred to as "DMCA"). Section 512(c)(1)(A) of the DMCA provides that an Internet service provider may claim an exemption from liability under one of the following circumstances: (1) It does not constitute knowledge of the existence of infringing content or infringing acts on its website or system; (2) In the absence of such knowledge, the existence of the infringing content or acts is not obvious; (3) In the case of knowledge of the existence of the infringing fact or the fact of infringement is very obvious, timely delete and disconnect the link of the infringing content. In the U.S. at the time, Internet information technology was developing at a rapid pace, and the DMCA was designed to fit the context of the times.]At that time, the platform as a "pure channel", only played the role of transaction aggregator and place provider, based on the neutrality of the platform, requiring the platform operator to assume the obligation to supervise and control the potential dangers, not only faced with the reality that the platform operator is not enough to control the dangers, but also impose too harsh a burden on the platform to the extent that it impedes the development of the platform economy. If an ISP is notified of an infringement, it has an obligation to remove it, otherwise it is deemed to have infringed. The "red flag" principle is an exception to the "safe harbour" principle, which means that if the fact of infringement of the right to disseminate information on the Internet is obvious, the ISP cannot ignore it or use the excuse of "not knowing about the infringement" to shirk its responsibility. If the ISP does not take necessary measures such as deleting, blocking, disconnecting, etc. in such a case, it should be regarded as knowing about the infringement of the third party, even though the right holder has not given any notice. The "notification - deletion" principle was born in the context of the times, and can protect intellectual property rights holders from infringement without being overly harsh on ISPs, and can effectively promote cultural dissemination and the development of the Internet industry. China has constructed corresponding legal provisions based on the "notification - deletion" principle. Articles 1194 to 1197 of the Civil Code of the People's Republic of China provide for the "notification - deletion" rule and network infringement liability. The relevant provisions relate to the content of the notification, the obligations of the network service provider after receiving the notification, the wrong notification and counter-notification system, etc. [Paragraph 1 of Article 1195 stipulates that "The notice shall include the prima facie evidence of the tort and the true identity information of the right holder.". Paragraph 2 specifies the obligations of the network service provider after receiving the notification, that is to forward the notification to the relevant network users and to take necessary measures according to the notification, and if the network service provider fails to take necessary measures in a timely manner, it shall be jointly and severally liable for any additional harm with the network user. Paragraph 3 stipulates the situation of erroneous notification of the right holder, that is, "If the right holder causes harm to the network user or network service provider by erroneous notice, the right holder shall assume the tort liability". Article 1196 provides for a counter-notification system, whereby a network user who receives a transfer notice may submit a statement of non-infringement to the network service provider, with the same requirements as those for the content of the notice, and "The statement shall include the prima facie evidence of non-existence of tort and the true identity information of the network user.". Article 1197 expands the circumstances under which an ISP is jointly and severally liable in Article 36(3) of the former Tort Liability Law to situations in which it "knew or should have known"].

With the prevalence of the user-generated content (UGC) model, the balance of interests expected by the "notification-delete" rule has been tilted, and in practice it is easy for platforms to use it as a tool to avoid liability. In previous infringement cases, short video platforms usually cited "the content was uploaded by users, and they were only network storage space providers" as a defence, claiming that they should maintain the principle of "technological neutrality" and had fulfilled the obligation of "notification and deletion", thus expecting to avoid infringement liability by using the “haven principle”. However, the "safe harbour" principle, which is lagging behind the development of technology allows platforms to acquiesce to large-scale infringement by users, enjoying the traffic generated by user-supplied content on the one hand, and avoiding liability for illegal content through the "notification-deletion" principle on the other, which results in a huge "value gap" between network providers and users of content. Analysed from the perspective of cost-benefit, digital service providers are neither required to pay the relevant fees nor bear responsibility for the dissemination of illegal content or false information on their platforms, yet they can enjoy the benefits they bring, which can hardly be said to be in line with distributive justice. Another important reason is that the amount of compensation awarded by the judiciary is smaller than the infringement benefits. From the reality of the cases, the relevant network platform on the one hand complained about high compensation, on the other hand is still continuing to infringe, the cost of infringement short video platform to pay is far less than the gain.

With the rapid development of artificial intelligence technology, platform content identification and filtering technology has been greatly improved. The balance of interests in the original "safe haven" principle should also be updated, with a gradual transition from passive "notification-deletion" rule to increasing the main responsibility of the platform. Since it is difficult for right holders to pursue the responsibility of uploaders, it is more conducive to the protection of the legitimate rights of right holders to let the platform bear the corresponding responsibility for infringement, which is also more in line with the purpose of incentivising creativity and encouraging the dissemination of works. Compared to post-infringement regulation, prior content censorship can more effectively avoid the damage that may be caused by the dissemination of illegal content or false information at a relatively low cost. Short video platforms should utilise technology to conduct a combination of form and content censorship, assume a higher duty of attention, and take a variety of measures to prevent infringement. Specifically, consideration could be given to incorporating content censorship and filtering obligations into the scope of the platform's responsibility to a limited extent, so as to achieve a balance of rights and obligations and a reasonable redistribution of benefits between content providers and network service providers, but at the same time, consideration should also be given to how to grasp the balance between the protection of users' basic rights and the platform's control of illegal content. In addition, in response to the dilemma that the cost of infringing the law is too low, the newly amended copyright law increases the punishment and recourse for copyright infringement, and makes it clear that punitive damages may be applied in the case of serious infringement. The work report of the Supreme People's Court also proposes that efforts be made to solve the problems of "difficult proof, long period of time, low compensation and high cost" in the protection of intellectual property rights. "Judicial pricing is the ultimate manifestation and guarantee of the market value of intellectual property, and high-value intellectual property rights should be awarded a large amount of compensation in order to reduce infringement, and infringement can be effectively stopped."

2.4 Paradigm Shift and Intrinsic Dynamics of Platform Responsibility

In the Internet era, power is decentralised, and the game of power and rights between the government, platform enterprises and the public shapes the social discourse and its turn. The change of platform responsibility has its own internal dynamics, the core of which lies in how to weigh the effective distribution between the state power and the rights of platforms, and how to minimise the negative effects brought by the development of platforms under the guidance of the concept of inclusiveness and prudence. In the short span of a few decades, the governance model has expanded from traditional regulatory tools to platform-exclusive solutions; from the belief that the Internet is a decentralised "beautiful new world" to the discovery that it may be an uncontrollable "leviathan" of the new era; from the single regulatory scheme of antitrust law and e-commerce platforms to digital gatekeepers and new utilities and other theoretical paradigms. The academic research on the object of platform governance can be divided into two stages, which can reflect the alteration of the old and new governance paradigms. The old governance paradigm focuses on explicit objects such as information, content, and behaviour, while the new governance paradigm focuses on implicit objects such as data and algorithms, and platform governance enters a deeper level. The division between the old and new is not a mere division of time, but a division of cognitive depth. The academic community's understanding of the object of platform governance has been deepening, and platform governance, algorithmic governance, and data governance are gradually intersecting.

The idea of governing platforms generally follows a programme of preserving innovation and gradually increasing responsibility. The initial "safe harbour" principle was more about placing platforms in a "technology neutral" position, allowing them to operate in a "safe harbour" unless the infringement was as obvious as a "red flag". For a long period of time, such as in 2017-2018, the safe harbour principle tended to be abused, with judges requiring few duty of care from platforms.

The regulatory shift from safe harbour to gatekeeper implies an iteration of the identification of the role and responsibility of the platform. The term "gatekeeper" first appeared in the field of information communication in 1947, when the American social psychologist Kurt Lewin first mentioned that "the smoothness of information dissemination depends on the opinion of the gatekeeper". The gatekeeper in the Internet era means that network service providers have the role of "gatekeeper" in cyberspace. A "gatekeeper" is defined as "a non-state institution that has the ability to modify the behaviour of others when the state's capacity is limited, and that prevents or minimises the spread of illegal information through the control of distribution channels and content censorship". Platform enterprises have become the new gatekeepers, not only possessing the power to effectively regulate the behaviour of upstream and downstream users, but also controlling and eliminating the negative social effects of illegal behaviours in a timely manner through distribution channels.

The concept of gatekeepers was first introduced by the EU in the Digital Marketplace Act, and this concept has been adopted by a number of countries, including the United States, France and Germany. Once a platform enterprise is recognised as a gatekeeper, it will be subject to more obligations, in particular, special ex ante regulatory obligations. First, the Act clearly lists the "core platform service categories" in a list, and identifies the digital gatekeepers from the three qualitative criteria of market influence, important gateway and market status, combined with the factors of annual turnover, market capitalisation, the number of active users and the market scope, so as to clarify the market expectation. Second, there are prior restrictions on abusive behaviours of gatekeepers. For example, it requires gatekeepers not to engage in ecological closure in terms of pre-installed software management, operating system use, service switching, data portability, etc., and not to engage in self-preferential treatment in terms of data integration and use, service comparison, etc. It also stipulates that digital gatekeepers shall not engage in abusive behaviours that restrict or exclude competition in the market, such as exclusive dealings, interfering with pricing, and bundling of products and services. Third, the operator concentration notification requirements have been strengthened. Digital gatekeepers are required to notify the European Commission of all mergers and acquisitions.

Not coincidentally, the United States has also begun a deep reform of antitrust laws and digital markets, taking the lead in proposing a comprehensive governance programme for large Internet platforms. On 19 July, 2022, the House Judiciary Committee officially released the Investigation of Competition in Digital Markets, which It pointed out some problems in the competition in the US digital market and focused on the abuse of market power by the four major technology giants and the use of exclusivity agreements, self-preferential treatment and other means to exclude and restrict competition.

In response, some scholars have also suggested that platform enterprises should be regarded as new public utilities, thus imposing corresponding liability. Public utilities generally refer to undertakings characterised by basic and public nature, positive network externalities and economies of scale. Governments adopt stricter price and access restrictions on such industries.  Since platforms control information, and the provision of public goods in the information society relies on information as a medium, the services of platforms are necessary for the normal life of users. This is in line with the characteristics of utility products, which are "necessary for the user and highly exploitable by the user". If platform enterprises are regarded as new public utilities, they should, first of all, comply with the principles of non-discrimination (prohibiting self-preferential treatment) and consumer protection, establish "firewalls" (separating the platform's infrastructural business from other businesses), and externally implement the requirements of openness and interconnection, and establish norms for data interconnection. However, some scholars hold the opposite view, arguing that the logic of utility regulation cannot be applied to the platform economy, and that the initiatives advocated by the new utility theory naturally cannot be directly applied

Generally speaking, different countries and regions have adopted largely the same regulatory thinking on competition in digital markets. Firstly, ex ante regulation is adopted in terms of the timing of intervention, secondly, asymmetric regulation is adopted in terms of the target of intervention, thirdly, the combination of "presumption plus designation" is adopted in terms of subject identification, and fourthly, attention is paid to behavioural and structural issues in enforcement cases.

3.The Chinese Model of Platform Governance: Logic and Prospect of the Main Responsibility of Platforms

The CPC Central Committee attaches great importance to the development of the platform economy, and has repeatedly put forward target plans to promote the healthy, standardised, and sustainable development of the platform economy during the current year.In January, 2022, the State Council issued the "14th Five-Year Plan" for the Development of the Digital Economy, which emphasised the strengthening of anti-monopoly, the prevention of disorderly expansion of capital, and the promotion of standardised, healthy, the sustainable development of the platform economy, the establishment of a sound system of market supervision, macro-control, policies and regulations adapted to the development of the digital economy, and the firm guard of the bottom line of security. On 25 March, the Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Construction of a Nationally Unified Large Market was issued and published, stressing the breaking up of issues such as the monopoly of data by platform enterprises, and the prevention of the use of data, algorithms, technical means and other means to exclude or restrict competition. On 29 April, the Political Bureau of the CPC Central Committee held a meeting, stressing the need to promote the healthy development of the platform economy, complete the special rectification of the platform economy, implement regular supervision, and introduce specific measures to support the standardised and healthy development of the platform economy. On 16 October, the report of the 20th Party Congress was released, pointing out that it is necessary to strengthen anti-monopoly and anti-unfair competition, break up local protection and administrative monopolies, and regulate and guide the healthy development of capital in accordance with the law. On 19 December, the Opinions of the Central Committee of the Communist Party of China and the State Council on Building a Data Base System to Better Play the Role of Data Elements was released. The Opinions mentioned in the "Working Principles": adhere to the sharing of common use, release the value of dividends. Reasonably reduce the threshold for market players to access data, enhance the sharing and universality of data elements, stimulate innovation and entrepreneurship, strengthen anti-monopoly and anti-unfair competition, and form a development model that is regulated by law, participates in the process, takes what it needs, and shares the dividends. On 20 December, Premier Li Keqiang presided over a State Council executive meeting, which once again emphasised "supporting the healthy and sustainable development of the platform economy". The newly revised Anti-Monopoly Law of the People's Republic of China (Amendment 2022) has been amended at various levels to improve the regulation of abusive behaviours in the digital economy and to increase the penalties for failing to declare the concentration of operators in accordance with the law, which improves the system of legal responsibility and reserves the interface for institutional refinement. Meanwhile, the meeting of the Political Bureau of the CPC Central Committee on 28 July also called for the implementation of regular supervision of the platform economy, promoting the standardised, healthy and sustainable development of the platform economy, completing the special rectification of the platform economy, and focusing on the launch of a number of "green light" investment cases.

3.1From penetrating regulation to asymmetric regulation

China's platform governance paradigm is also moving forward in exploration. Since there is a real need to strengthen the responsibility of platforms, the transformation of the functions and roles of platforms will inevitably lead to changes in the responsibility of platforms and give rise to new governance principles. Firstly, there is a large market for the "enterprise-market duality" of platforms, and there is a clear need for innovative regulations on how to deal with new types of organisations such as platforms through public power. For example, Zhang Linghan and other scholars gradually extended the concept of Internet financial regulation to the doctrine of penetrating regulation. Penetrating regulation has two connotations: on the concept of regulation, the pursuit of substance over form, penetrating the Internet business model directly to the actual function of the Internet; on the means of regulation, invasive process regulation, elemental regulation and algorithmic regulation. Some scholars have also argued that a strong regulatory governance paradigm should be adopted when dealing with the re-centring of the Internet world. In the open Internet stage, the dominant discourse is to limit government interference and support innovation and development; in the platform-based Internet stage, the dominant discourse is the negative externality impact of the network; and in the era of the strongly regulated Internet, the dominant discourse is the return of the role of the state as the traditional authority in Internet governance. At the same time, it is also advisable to consider extending the programme of asymmetric regulation to platform governance, i.e. applying different levels of regulatory intensity to different types of platforms. At its core, it is about "rooting out the strong and protecting the weak": limiting the competitive behaviour of dominant firms so that non-dominant firms can thrive.

Second, the dual attributes of platform enterprises also determine the importance of self-regulation and cooperative governance. Starting from the internal business logic of platforms, some scholars have put forward self-regulation mechanisms such as non-neutral pricing mechanism, product quality control mechanism, disciplinary mechanism and reputation mechanism. Based on the internal operation logic of platforms, some scholars have put forward the principle of "platform justice", which advocates that platforms should provide differentiated services in a fair manner, conform to public ethical norms, and be subject to due process constraints.

Finally, with the rapid shift in the nature of platforms from corridors to ecosystems, it seems difficult to say that it is "fair" to stick to traditional rules. In particular, platform operators should not turn a blind eye to the fact that they have become the dominant players in the ecosystem and are benefiting from it, which objectively puts consumers in a more unfavourable position and creates the conditions for higher risks for them. Moreover, it is also more efficient for the platform operator to assume the obligation to control risk than for the victims to be dispersed. With the development of the platform liability system, governments and relevant stakeholders are demanding that the law intervene in advance in the commercial operation and technological development model of online platforms, emphasising the use of the role of online platforms as "gatekeepers", and even imposing strict liabilities on platforms for users' illegal behaviours, with a view to improving the strength and level of online law enforcement.

3.2The connotation and logic of entity responsibility

In the field of platform governance, China draws on the strengths of various countries, not only draws on the EU's attempts and exploration experience, but also builds a platform governance system with Chinese characteristics based on the actual situation of China. Professor Zhang Xinbao believes that "gatekeepers refer to Internet operators who control key links in the mobile Internet ecosystem and have the resources or ability to influence the ability of other personal information processors to process personal information. Gatekeepers include application distribution platforms, mobile terminal operating systems and platform-based APPs", which defines gatekeepers as super-large platforms [ Zhang Xinbao, "Research on the Establishment of Special Obligations for the Protection of Personal Information of "Gatekeepers" in the Internet Ecology", Comparative Law Research, No. 3, 2021, p. Page. ]。 This coincides with the "Guidelines for the Classification and Grading of Internet Platforms (Draft for Comments)", which proposes a platform classification scheme for super platforms, large platforms and small and medium-sized platforms based on the scale of users, types of services and restricted capabilities. The "super-large platforms" in the Guidelines for the Implementation of Entity Responsibilities by Internet Platforms (Draft for Comments) released at the same time also clearly refer to "super platforms" and "large platforms". Article 58 of China's Personal Information Protection Law establishes the basic framework of China's gatekeeper system, and the expression of "important Internet platform services" is similar to that of "core platform services" in the Digital Market Law, which implies the requirement to classify platform services. "Huge number of users and complex business types" establishes two main criteria for grading and identifying enterprises that provide important Internet platform services; The four specific requirements clarify the special obligations that the gatekeeper must perform [Zhou Hanhua<个人信息保护法>, "Analysis of the "Gatekeeper Clause", Legal Science, No. 5, 2022, p. Page. ]。 The Guidelines for the Implementation of Entity Responsibility by Internet Platforms (Draft for Comments) for the first time put forward the basic assumptions of the Chinese version of the gatekeeper system, and established a super platform identification procedure that is first classified and then graded, but there is still a gap between the legal provisions and the specific implementation, and the creative implementation of the law and systematic solutions need to be further explored.

Under the precondition of classification and grading, internet platform enterprises bear common but differentiated compliance obligations. The Guidelines for the Classification and Grading of Internet Platforms (Draft for Solicitation of Comments) set forth requirements for ultra-large internet platform operators in areas such as fair competition demonstration, equal governance (no self-preferential treatment), ecological openness, data management, internal compliance governance, service risk assessment and prevention and control, security audits, and promotion of innovation, and information management (verification, recording, and publicity), user management within the platform, platform content management, prohibition and restriction control, service agreements and transaction rules, credit evaluation, anti-monopoly, anti-unfair competition, and data acquisitionIt is required for all internet platform operators in areas such as arithmetic legislation, price code of conduct, advertising code of conduct, protection of intellectual property rights, prohibition of pyramid schemes, governance of online black and gray industries, network security, data security, protection of natural persons' privacy and personal information, consumer protection, protection of operators on the platform, protection of workers, protection of special groups, environmental protection, tax obligations, and cooperation with law enforcement.

3.3 Entity responsibility in anti-monopoly in the digital market

The tension between platform enterprises and their own leads to great problems in the identification of monopolies. The platform is both a business and a marketplace that matches supply and demand. [Chen Yongwei, "Rethinking the Platform Anti-Monopoly Issue: Analysis from the Perspective of "Firm-Market Duality", Competition Policy Research, No. 5, 2018, pp. 25-34.] As the discussion deepened, the "theory of private power and public nature" emerged. Liu Quan pointed out that online platforms have both private power and public attributes, and the platform shapes an organized private order, and undertakes the public function of maintaining the order of the online market and protecting the rights and interests of users. [Liu Quan, "The Publicness of Online Platforms and Their Realization: From the Perspective of Legal Regulation of E-commerce Platforms", Legal Research, No. 2, 2020, pp. 42-56.] Before Liu Quan, some scholars advocated that platforms were traditional market organizations [Wu Xiangui, "The Legal Positioning of Online Trading Platforms", Journal of Chongqing University of Posts and Telecommunications (Social Science Edition), No. 6, 2008, p. 48. ]。 With the deepening of the discussion, the "theory of private power and public attributes" and the "dual theory of market and enterprise" have become common theories. On this basis, Zhao Peng draws inspiration from the principle of "network neutrality", and further argues that the tension of the platform itself is manifested as a pair of contradictions: decentralized services and centralized management. On the one hand, the platform needs to ensure that all kinds of users can access and interact with the platform on an equal footing. On the other hand, the platform needs to carry out a certain degree of centralized management to achieve the purpose of safeguarding the public interest and efficient supply and demand allocation. [Zhao Peng, "Platform Justice: The Basic Principles of Legal Regulation of Internet Platforms", People's Forum, Academic Frontiers, 2021, No. 21, pp. 75-84.] ]

CNKI was punished

In May 2022, the State Administration for Market Regulation (SAMR) opened an investigation into CNKI's suspected monopolistic behavior in accordance with the Anti-Monopoly Law. On December 26, 2022, after a seven-month investigation, the State Administration for Market Regulation (SAMR) issued a penalty decision on CNKI's suspected abuse of market dominance. The Penalty Decision found that CNKI had a dominant position in China's Chinese academic literature online database service market, and had committed two abusive behaviors of "unfairly high prices" and "refusal to trade" in eight years since 2014. The penalty decision ordered CNKI to stop its exclusive cooperation and imposed a fine of 5% of its domestic sales of 1.752 billion yuan in 2021, totaling 87.6 million yuan. At the same time, it adheres to the principle of paying equal attention to regulating and promoting development in accordance with the law, supervises CNKI to fully implement rectification measures and eliminate the consequences of illegal acts, and requires CNKI to carry out comprehensive rectification around the aspects of terminating exclusive cooperation, reducing the burden on users, and strengthening internal compliance management, so as to promote the standardized, healthy and innovative development of the industry.

On July 10, 2022, the State Administration for Market Regulation (SAMR) issued administrative penalty decisions on 28 cases of failure to declare illegal implementation of concentration of undertakings in accordance with the law, most of which involved digital platform enterprises with VIE structures.

After nearly two years of discussion and revision, the Amendment to the Anti-Monopoly Law was finally deliberated and passed by the 35th Session of the Standing Committee of the 13th National People's Congress on June 24, 2022, and came into effect on August 1, 2022. One of the highlights is the clarification of the specific rules applicable to the anti-monopoly regime in the field of platform economy. Due to the natural characteristics of cross-industry "winner-takes-all" and composite form of "multi-ring ecosystem", the marginal cost of platform enterprise expansion is almost zero with the blessing of economies of scale [Ma Pingchuan, "Regulatory Reform and Response to Platform Anti-Monopoly", Law Review, No. 4, 2022, pp. 176-180. ], so the definition of "relevant market" is very important. The new law strengthens the review of concentrations of undertakings that do not meet the notification criteria but may have the impact of eliminating and restricting competition, so as to avoid and reduce the situation where the transactions involved in the case do not meet the notification criteria but have a greater impact on market competition, which is particularly related to the unreasonable ecological expansion in the field of platform economy. The revision of the Anti-Monopoly Law confirms the anti-monopoly compliance guidelines set out in the Anti-Monopoly Guidelines of the Anti-Monopoly Commission of the State Council in the Field of Platform Economy at the national legal level. In particular, the determination of abuse of market dominance by internet platform enterprises is still carried out under the existing legal framework, and the constitutive elements are not fundamentally different from those of traditional enterprises abusing market dominance, and it is necessary to determine whether there is abuse based on the competitive effect of the enterprise's market power and business conduct. The Amendment to the Anti-Monopoly Law also clarifies the issue of anti-monopoly in the digital market in the general provisions, stipulating that business operators shall not use data and algorithms, technology, capital advantages, platform rules, etc. to engage in monopolistic acts prohibited by this Law, which is of important guiding significance for the trial of cases such as monopoly agreements, abuse of market dominance, and concentration of undertakings in the field of platform economy. At the same time, it clarifies the specific manifestations of abuse of market dominance in the digital market. Emphasizing that business operators with a dominant market position shall not use data, algorithms, technology, platform rules, etc., to engage in acts of abusing a dominant market position as provided for in the preceding paragraph, echoing Article 9 of the General Provisions, organically connecting with the Anti-Monopoly Guidelines of the Anti-Monopoly Commission of the State Council in the Field of Platform Economy and other provisions, and reserving the necessary space for future institutional development.

3.4Responsibility gradient under the concept of meta-regulation

According to the "Institutional Marginal Return Theory" of economics, it can be found that platform rules and national laws belong to institutional resources, and the optimal combination point of the two is the boundary point of institutional resource input, so we should strive to reduce the information asymmetry between regulators and regulatory objects, evaluate the impact of law on the platform economy, and absorb the internal rules of the platform, so as to realize the cooperation between national laws and platform rules [Wang Yugen, "Towards Cooperative Governance: Regulating the Institutional Boundaries and Optimization of the Platform Economy through Law", Hebei Law Science, No. 1, 2021, p. 2. ]。 Under the meta-regulation theory, the regulatory object is authorized by legal norms to achieve the basic goal of administrative supervision through internal management mechanisms or standard systems. Meta-regulation theory is a type of regulation between national regulation and self-regulation, and its core idea is to implement regulation for self-regulation [Zhao Jingwu, "The Legal Regulation Path of "Metaverse" Security Risks: From Hypothetical Regulation to Process Risk Prevention", Journal of Shanghai University (Social Sciences Edition), No. 5, 2022, p. Page. ]。 In the specific implementation process, the self-regulation of the regulated entity can be supervised through the government's external guidance, and the indirect regulation of the platform can be carried out through the establishment of an internal rule-making mechanism, an external supervision mechanism, an external review mechanism, etc. Page. ]。 The advantage of meta-regulation theory is that it recognizes that the ability to achieve regulatory goals is primarily in the hands of the regulated, so it adopts a "distancing" supervision model. By giving full play to the multiple regulatory forces of the government, the market, and the community, data controllers are encouraged to give full play to their own resource advantages and carry out self-governance from both positive and negative sides [Cheng Ying, "Data Protection and Computing Regulation under the Meta-Regulatory Model: Taking the EU <General Data Protection Regulation>as a Research Sample", Legal Science, No. 4, 2019, p. Page. ]。

Under the concept and system design of meta-regulation, in order to comply with legal norms, enterprises set up more targeted and operational regulations around their internal normative systems and their own activities. Compared with external regulatory authorities, platforms have more internal information and expertise, making it easier to identify problems in corporate compliance. As far as the platform enterprises themselves are concerned, the law should clarify the main responsibilities of the platform in all aspects, such as responsible governance, fair operation, law-abiding compliance, consumer responsibility, employee responsibility, etc., and it is also necessary to build a risk assessment mechanism and a full-cycle data protection mechanism. This kind of governance is graded and typical. For different types of platform enterprises, the degree of regulation is very different. When governing platforms, it is necessary to adopt the principle of stepwise regulatory intensity, taking into account factors such as the type of platform, the type of goods and services provided, the type of technical architecture and the strength of control, and the strength of the public nature involved. After the failure of self-regulation of platform enterprises, the intensity of government regulation and the intensity of judicial intervention are roughly a constant indicator. If the government's regulation of a certain platform enterprise is at a strong level, then the judiciary should remain humble and intervene to a limited extent; If, for some reason, the government has not yet regulated a platform company, then the judiciary will need to provide stronger relief.

"There should not be an all-have/all-nothing duality in the application of platform responsibility, but the corresponding platform responsibility should be configured according to the similarities and differences between specific types of platforms and typical e-commerce platforms" [Xue <Electronic Commerce Law>Jun, ". The Connotation of Platform Responsibility and Its Application Mode", Legal Science (Journal of Northwest University of Political Science and Law), No. 1, 2023, No. 1, No. 1, No. 1, No. Page. ]。 In the legislative process of defining the liability of platform operators in the E-commerce Law, the first, second and third draft of the E-commerce Law stipulates that the platform operator bears joint and several liability, but due to the strong opposition of the platform operator, it was changed to corresponding supplementary liability in the fourth draft of the e-commerce law, but during the consultation period, the Didi hitchhiker murder case occurred, which aroused strong opposition from consumers, and the legislator was difficult to balance under the deadlock between the two sides, and the legislation was ambiguous [Ma update: "Platform Operator "Corresponding Liability" Identification Standards and Concretization—— Analysis of Article 38, Paragraph 2 of the E-Commerce Law", Eastern Jurisprudence, No. 2, 2021, pp. 86-97.] .  The E-Commerce Law only stipulates that platform operators have "qualification review obligations" and "security guarantee obligations", but does not clearly define their connotation and extension. Therefore, in order to provide objective and clear standards for the performance of judicial obligations, it is recommended that the relevant laws and regulations make clear provisions on the concepts of "qualification review obligation" and "security guarantee obligation" as soon as possible, and should clarify the scope, frequency, method of review and emergency response measures of platform operators for on-platform operators. Second, platform operators should be subject to a "monitoring obligation". Drawing on the successful experience of foreign countries, foreign courts have held that the platform operator has the power and ability to supervise and control the direct infringement of the operator on the platform, that is, it has a "monitoring obligation", and if the platform operator can obtain direct benefits from the infringement of the operator on the platform, the platform operator will bear the tort liability.

The "corresponding liability" provided for in paragraph 2 of Article 38 of the E-Commerce Law should fall within the scope of tort law adjustment in terms of the nature of liability, but since platform operators bear higher security obligations than venue managers as stipulated in paragraph 2 of Article 1198 of the Tort Liability Part of the Civil Code, they should not be directly applied by analogy. When specifically attributing liability, the "corresponding liability" shall apply the presumption of fault, that is, the platform operator bears the burden of proof that it has performed its obligations with due diligence and is not at fault.