Two Sessions Topics | Ke Yunfeng's voice affects 520,000 pharmacies

On March 5th, Ke Yunfeng, a representative of the National People's Congress and chairman of Dashenlin Pharmaceutical Group Co.

He pointed out that due to the excessive development of the Internet platform economy, it is causing the ecological destruction of all walks of life, making the real economy unable to fully compete.

Ke Yunfeng said that the country has encouraged the development of the Internet and the platform economy for many years.

The necessity of revising the "Anti-Unfair Competition Law" is reflected in the following three aspects:

First, the revision of the "Anti-Unfair Competition Law" is conducive to establishing a correct understanding of the real economy and platform economy and the need for top-level design.

The platform economy is easier to obtain permission and openness than the real economy, and it is easier to obtain convenience; it is unfair to allow the real economy to move forward with the burden of the platform economy to make comparisons with the platform economy.

Second, amending the "Anti-Unfair Competition Law" is conducive to creating a fair environment.

Third, the amendment of the "Anti-Unfair Competition Law" is conducive to safeguarding the right relief for damage to the real economy.

To this end, Ke Yunfeng suggested that amendments to the "Anti-Unfair Competition Law" regarding subsidies and price improper and evolving improper behavior restrictions should be added.

1

Online low prices for traffic, pharmacies are miserable

In order to attract traffic, the price of the same drug on the e-commerce platform is only half of the company's regular price, and even the lowest price is only 1/3 of the regular price.

Recently, a notice from Sichuan "Meidakang Pharmaceutical Co.

In the end, the manufacturer had to decide to stop supplying JD’s self-operated pharmacies and Ali Health starting February 23.

In this regard, some people in the industry believe that the use of low prices as a bait to attract traffic is not in compliance with the regulations and is a vicious competition.

And such an approach is not the first in the pharmacy industry.

It can be said that both the drugstore owner and the vegetable vendor are also representatives of the general public.

2

Offline pharmacies, "medical insurance" qualification has become a life-saving straw

The competition between online e-commerce and offline physical pharmacies has not only appeared in recent years, but compared to e-commerce platforms, offline pharmacies still have their own "health weapon", that is, medical insurance qualifications.

For the vast majority of groups who are accustomed to using medical insurance cards to purchase medicines, the ability to swipe the card has become a major determinant of the success of their purchase behavior.

From February 1, the "Interim Measures for the Management of Medical Security in Retail Pharmacies" (hereinafter referred to as the "Measures") formally came into effect.

It is reported that in addition to the 17 operating red lines for offline designated retail pharmacies, the "Measures" also deleted the expression in the original consultation draft regarding the qualifications for online pharmacies to apply for designated points.

The original draft for comments made it clear: retail pharmacies that have obtained the "Drug Business License" can voluntarily apply for medical security designation.
Internet pharmacies, retail pharmacies that have drug network sales business or conduct drug network sales through a third-party drug network transaction platform, rely on their physical pharmacies to apply for designation.

In this regard, the industry believes that online pharmacies apply for designated qualifications "may be changed.
"

Therefore, according to the current situation, the medical insurance qualification of designated pharmacies is still the main guarantee to ensure the passenger flow of pharmacies.

3

The rejection of the monopoly war has started

At the end of 2020, the central government put forward for the first time "strengthening anti-monopoly and preventing the disorderly expansion of capital", and the development of platform economic compliance has become an important issue.

For this reason, at this year’s National “Two Sessions”, Ke Yunfeng proposed to amend the “Anti-Unfair Competition Law” to promote the healthy development of the platform economy.

First, setting low-priced subsidies harm fair competition as unfair competition clauses;

Second, the establishment of the operator’s request to review the right clauses involving "excessive" competition (including the review of the local government's subsidies and policies to the relevant persons), and the identification of the addition of unfair competition.

It can be said that the result of vicious competition is monopoly.

In November 2020, in order to prevent and stop monopolies in the Internet platform economy, protect fair competition in the market, safeguard consumer and social public interests, and promote the sustainable and healthy development of the platform economy, the State Administration for Market Regulation drafted the “Regarding Countermeasures in the Platform Economy” Monopoly Guidelines (Draft for Soliciting Opinions)" and openly soliciting opinions from the public.

According to this document, businesses are forced to "choose one of the two", big data is not familiar, or they are deemed to be monopolistic.

In December 2020, the advancing community group buying became the "first shot" in the field of Internet antitrust supervision.

On December 22, the State Administration for Market Regulation and the Ministry of Commerce organized an administrative guidance meeting to regulate the order of community group purchases, and emphasized that Internet platform companies must strictly regulate community group purchase operations and strictly abide by the new "nine no" rules.

The first of these is not to abuse the power of independent pricing through low-price dumping, price collusion, price bidding, price fraud, etc.
This is the core of the new "Nine Musts" regulations and the most prominent problem of community group buying.

And low-price dumping, isn't it the main means for Internet companies to crush physical pharmacies?

In this regard, from the state to the local level, relevant departments have also strengthened price supervision.

4

Place: 8 red lines to ensure reasonable competition

According to Jilin's WeChat official account, the Jilin Provincial Market Supervision Department recently organized an online price reminder meeting.
Representatives of 15 chain pharmacies, supermarkets, and community group buying platform operators participated in the meeting.

The meeting emphasized that operators must strictly abide by the "Price Law", "Administrative Penalties for Pricing Illegal Acts", "Regulations on Clear Marking of Goods and Services", and "Prohibition of Price Fraud" and other laws and regulations.
Conduct business activities in accordance with regulations and consciously avoid the risks of violations of laws and regulations.

The market supervision department will continue to intensify law enforcement inspections, severely crack down on various price violations in accordance with the law, and resolutely publicly expose serious and bad price violations.

The meeting pointed out that since the outbreak of the new crown epidemic, community group buying has developed rapidly, and community group buying platforms and operators participating in community group buying business must strictly implement the “nine must nots” of community group buying when carrying out business activities:

One is not to abuse the power of independent pricing through low-price dumping, price collusion, price bidding, price fraud, etc.

The second is not to illegally reach or implement any monopoly agreement that fixes prices, restricts the production or sales of commodities, or divides the market.

The third is not to conduct predatory pricing, refusal to deal, tying and other behaviors that abuse market dominance without justified reasons.

Fourth, it is not allowed to illegally implement concentration of undertakings, eliminate or restrict competition.

Fifth, it is prohibited to engage in unfair competition behaviors such as commercial confusion, false propaganda, commercial slander, etc.
, which endanger the fair competition market environment.

Sixth, it is not allowed to use the advantages of data to "kill familiarity" and harm the legitimate rights and interests of consumers.

Seventh, technological means must not be used to damage the order of competition and hinder the normal operation of other market entities.

Eighth, it is not allowed to illegally collect and use consumer personal information, which may bring potential safety hazards to consumers.

Ninth, it is prohibited to sell counterfeit and shoddy goods, which endanger a safe and secure consumer environment.

In short, a benign industry market environment is like a healthy ecosystem.
There should not be only big trees but also small grasses.
Orderly competition and win-win cooperation can achieve long-term development.

Attachment: Suggestions on the revision of the "Anti-Unfair Competition Law"

The country has been encouraging the development of the Internet and platform economy for many years.
The direction is correct, but the endless development of the Internet platform economy is causing ecological destruction in all walks of life.
Improperly manifested in the local pursuit of the "platform economy", the policy is inclined, the platform economy can easily obtain various subsidies and policy resources under the cover of "technology", and obtain inclined support in development, resulting in the real economy Unable to compete adequately.
Moreover, the conditions for the application of the Anti-Monopoly Law are controversial, and cases are often delayed for a long time.
At the same time, some monopolists have a high degree of influence in the field of interest.
In fact, they do not fully protect the development of the real economy.
If the economy causes substantial damage, the "Unfair Competition Law" should be revised to achieve better standards.

The necessity of revising the "Anti-Unfair Competition Law" is reflected in three aspects:

1.
The revision of the "Anti-Unfair Competition Law" is conducive to establishing a correct understanding of the real economy and platform economy and the need for top-level design.
The platform economy is easier to obtain permission and openness than the real economy, and it is easier to obtain convenience; it is unfair to allow the real economy to move forward with the burden of the platform economy to make comparisons with the platform economy.
It is necessary to recognize the essence of innovation in the top-level design consciousness.
And technological content.
Does the real economy represent backwardness and the Internet represents advancedness? The requirement of the real economy to loosen restrictions is to break the regulations, and the Internet platform proposes to be an innovative spirit.
This long-standing view is a very vivid summary.
Many people subconsciously have this kind of thinking, ignoring the pillar role of the real economy itself.
Amendments to the "Anti-Unfair Competition Law" will help reverse incorrect perceptions.

2.
Revising the "Anti-Unfair Competition Law" is conducive to creating a fair environment.
The plundering attribute of the platform economy is higher than the contribution value, which has an ecological impact on the entity and requires a fair environment.
There are objective needs for the platform economy, but it is far from enough to subvert offline entities in substance, but its way of holding high and struggling has caused substantial damage and industry panic on entities in the early and mid-term.
The platform economy is prone to form local protection due to its volume and local jurisdictional attributes.
In fact, there is an unfair regulatory environment (for a long time, the local economy’s pursuit and competition for the economic volume of the Internet has amplified the unfair environment and caused some cities.
Great commerce is unfair.
For example, a certain city is responsible for the distribution of goods, people, and fields of commerce entities, but a large amount of data development volume is divided by other cities).
The damage caused by public vehicles and the catering industry is already an objective fact, and a large number of entity operators have become innocent victims in this process.
The revision of the "Anti-Unfair Competition Law" to protect the business of the real economy has a more realistic and rapid effect than the application of the "Anti-Monopoly Law.
"

3.
The revision of the "Anti-Unfair Competition Law" is conducive to safeguarding the right relief for damage to the real economy.
Strict supervision of the real economy and prudential supervision of the Internet are unfair, which needs to be reversed.
The "Anti-Monopoly Law" has not been applied to the platform economy for twelve years after its implementation.
Looking back, the "Anti-Unfair Competition Law" even deleted the unfair clauses of low-price competition.
The platform economy is good at using the concept of amplifying subsidies and creating low prices to create an unfair competitive environment and undermine the fair business environment.
Take the pharmaceutical sales industry as an example.
When prescription drugs are not open for sale, extensive online sales exist in large numbers, and online sales are basically not effectively controlled.
In the application of the "Anti-Monopoly Law", there may be places that require considerable conditions and caution, but more attention should be paid to the application of the "Anti-Unfair Competition Law" to give entity operators more extensive rights and rights protection.

To this end, I suggest: to increase the "Anti-Unfair Competition Law" on subsidies and price improper and evolving improper behavior restraint amendments.
First, set low-priced subsidies to harm fair competition as an act of unfair competition; second, set a clause on the right of operators to request review involving “excessive” competition (including subsidies and subsidies to relevant parties from local governments).
Policy review), as well as the addition of an act of unfair competition.
Hope it can be adopted.

Representative of the 13th National People's Congress: Ke Yunfeng

March 5, 2021