It is not unfair for the bulls that manipulate market prices to be investigated for antitrust violations, but conspiracy theories are absolutely unacceptable.

It is not unfair for the bulls that manipulate market prices to be investigated for antitrust violations, but conspiracy theories are absolutely unacceptable.

Since the beginning of this year, China has strengthened supervision of market monopoly, and large Internet companies such as Alibaba, Meituan, and Tencent have been investigated. Recently, the sword of anti-monopoly has been wielded towards the traditional real economy. The socket king, Bull, announced that the company had received a letter from the Zhejiang Provincial Market Supervision Administration and would accept an anti-monopoly investigation.

Bull Group is the dominant player in the domestic socket field. In 2020, Bull's converters and wall switches ranked first in market share on Tmall, with annual operating income exceeding 10 billion yuan. Bull Group's prospectus shows that in 2018, the company's converters and wall switches had market shares of 66.39% and 26.08% on Tmall, respectively.

In February 2020, the Bull Group was listed on the Shanghai Stock Exchange, and its market value has been rising all the way, and has now exceeded 100 billion. In the "2020 Hurun Global Rich List", Bull Group Chairman Ruan Liping made his first appearance on the list with a fortune of 49 billion yuan, ranking 297th.

Judging from its market share, Bull does have the conditions to constitute a monopoly, but as a small electrical device, it has also been subject to antitrust investigation, and the result still surprised many people - monopolistic behavior is not exclusive to super large companies.

Formulating national standards to exclude competition? Conspiracy theories are not acceptable!

After the news of Bull's antitrust investigation was announced, a voice emerged online: In order to consolidate its market position, Bull manipulated the revision of the national standard for sockets many times, and used insider information to iterate its products in advance, thereby attacking its competitors.

This statement seems reasonable at first glance, and Bull has indeed participated in the formulation and revision of national standards many times. However, the formulation and revision of national standards were proposed by the China Electrical Equipment Industry Association, and not only Bull was involved in the drafting, but also companies such as Hongyan Electric and Panasonic Information Instruments that compete with Bull in socket, wall switch and other businesses.

Therefore, unless there are clear investigation results, it is not appropriate to make such serious accusations lightly.

Earlier, Changan Ford and Lenovo were also investigated for similar behavior. Changan Ford was fined 162.8 million yuan in 2019, while Lenovo was exempted from further punishment after submitting rectification measures and effectively implementing them.

What is vertical monopoly? What harm does it cause?

In the penalty notice against Changan Ford, the State Administration for Market Regulation mentioned the term "vertical monopoly". The so-called "vertical monopoly" refers to the behavior of enterprises using their own advantageous position to manipulate and control the production and sales of products in related fields in order to exclude and restrict competition. The corresponding "horizontal monopoly" refers to the behavior of multiple competing enterprises in the same industry forming a horizontal alliance to exclude and restrict competition. Both vertical and horizontal monopolies will lead to market prices being manipulated by merchants at will, damaging the interests of consumers.

Vertical monopoly is widely found in industries related to daily life, such as medicine, daily chemicals, and clothing. In particular, companies like Bull, which have an absolute advantage in a single field, are more likely to take the opportunity to control the downstream market price. For example, Bull sells sockets to dealers at 20 yuan each, but stipulates that the dealers' selling price must not be lower than 100 yuan each. This will lead to two consequences:

First, dealers believe that Bull sockets have greater profit margins, so they are less willing to purchase sockets from other brands, which indirectly dampens the enthusiasm of other brands for product development and is not conducive to competition between brands. Second, due to the existence of price agreements, the space for dealers to compete through profit sharing is greatly reduced, which ultimately makes consumers bear higher costs.

If Bull is a monopoly, it will be fined and required to make corrections. This may lead to a drop in the price of Bull products, and other brands may also take the opportunity to rise. In any case, I hope that all brands can face competition head-on and speak with product quality, so that consumers can benefit.

In the year of anti-monopoly, supervision will continue to increase

In 2020, China handled 109 monopoly cases and imposed fines of 450 million yuan. Since the beginning of this year, anti-monopoly work has been further accelerated, the first revision of the Anti-Monopoly Law has started, and the Supreme Court has stated that it will strengthen anti-monopoly trials in the Internet platform economy. Alibaba was fined a huge amount of 18.2 billion yuan this year.

But this does not mean that other industries can remain immune. The investigations into vertical monopoly practices in the real economy such as Yangtze River Pharmaceutical and A.C. Bull indicate that the breadth and intensity of antitrust supervision will continue to increase.

A legal expert predicted at the beginning of the year: "Strengthening antitrust will be the new normal. This year, we will focus on handling major cases. So far this year, four antitrust fines of over 100 million yuan have been issued, showing a new trend in antitrust law enforcement. China's limited antitrust law enforcement forces and resources should also be effectively allocated, shifting the focus to major cases, and focusing on investigating and handling cases that are of great significance or have a major impact on competition and people's livelihood."

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.

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