Three Issues of Platform Economics' Cooperative Governance

The Report

Three Issues of Platform Economics' Cooperative governance was jointly created by Deloitte China Technology, Media & Telecommunication Industry, Deloitte Research and Alibaba Research Institute. This paper raises up three major issues of platform economics' cooperative governance and clarifies the necessary of platform economics in the transformation of China's society through the discussion on the development trends, characteristics and the regulation orientation of platform economics, and hope to provide reference for government regulations and relevant enterprises who are involved in the ecosystem.

Viewpoints / key findings

Issue 1: Protection of the Rights and Interests

With the convenience and efficiency e-commerce brought by the Internet, the globalization, virtuality and non-centralized network management of the Internet also bring all kinds of risks to the consumers. In addition, the rapid development of e-commerce, mass data and personalization, the requirements for quick response to governance, diversity, ecologicalization and cross area would not make the traditional governance model adapt well to e-commerce. Objectively, a new kind of governance model which could adapt to the development of the Internet is needed now. Platform governance is the result of complying with the complex requirements for environmental governance in the information society. The platform governance is the one to meet the needs of information society and economic globalization, of which the comprehensive study will offer reference and support for current information society and government regulation.

Issue 2: Reasonable Tax

Platform economics have driven the rapid development of the upstream supply chain and the downstream services. It is expected that the platform economics will create a tax revenue of 77-110 trillion Yuan for China by 2030, of which the B2B will take the dominant part among the online retailers in contributing the tax revenue for a long time.

Platform economics greatly change the traditional trade modes, ways for coordination and distribution of responsibilities as well as economic theory framework. In addition, platform economics also bring about the overall change of the economic structure and bring new opportunities and challenges to the traditional tax theory and practice. From the aspect of legislation, it is an important tax system guarantee for the development of the platform economics to maintain uniform tax collection and management rules online and offline as well as balance the rights and obligations among the government, taxpayers and the third party. Encouraging innovations and support the development of small and micro enterprises should become the core policy orientation to promote the current economic growth of the platform. The long-term policy orientation should be aimed at implementing a more concise, efficient, dynamic and flexible tax system arrangement and accelerating the construction of a future-oriented and globally competitive tax system.

Issue 3: Fair Competition

Nowadays, the development of platform economics has put forward new requirements to the notion and rules of anti-monopoly laws. Firstly, as the platform exhibits the characteristics of network effects and marginal cost regression, which mean the scale of a platform is directly proportional to its efficiency, namely, the larger the scale of the platform is, the more beneficial to improve the efficiency of resource allocation. From this perspective, it can hardly judge the relationship between the scale and efficiency of the platform with the traditional standard. Secondly, the platform is a bilateral market or multilateral market in which there are interdependent relationships and mutual influence among the parties involved. In addition, the competition analysis of the platform is quite different from that of traditional competition analysis. Therefore, establishing a new economic analysis paradigm under the circumstance of platform economics and redefining the boundaries between legality and illegality of various business arrangements are important new topics for the research and practice of anti-monopoly.