Economic Analysis Under the Anti-Unfair Competition Law in China: Tencent v. Xinghui

By Vanessa Yanhua Zhang, John Jiong Gong & Nina Yin 

In this paper we review the recent unfair competition case Tencent v. Xinghui. It is one of the few unfair competition cases in which economic analysis on the welfare effects of the alleged conduct was admitted as evidence. With the limited information provided in the decision, we propose a standard approach as to how to evaluate welfare effects in this type of multi-sided business. We suggest that the welfare analysis could include the assessment of welfare effects on the consumers, the online video company, the advertisers, and the browser company. At last, we turn to an international comparison of the legal treatment of ad blocking in both the U.S. and Europe, noting that the Chinese court takes its own unique approach in this regard.

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