The Anti-Monopoly Regulation of Hub-and-Spoke Algorithmic Collusion

DOI: https://doi.org/10.62517/jel.202614111

Author(s)

Kunquan Li

Affiliation(s)

Law School, China Jiliang University, Hangzhou, Zhejiang, China

Abstract

In the context of the digital economy, the widespread application of algorithms has given rise to a novel form of monopoly—algorithmic collusion within hub-and-spoke agreements—which has become a focal point of anti-monopoly regulation. Hub-and-spoke agreements break the traditional dichotomy of monopoly agreements, featuring a superimposed horizontal and vertical structure with a hub and spokes. Through algorithms, they enable price coordination among undertakings, characterized by concealment, stability, and the coexistence of explicit and tacit collusion. Although China's current Anti-Monopoly Law and relevant guidelines have responded to this phenomenon, regulatory dilemmas persist, including vague legislative principles, a limited scope of responsible parties confined to "undertakings," and unclear allocation of responsibility. To address these challenges, it is necessary to introduce the principle of rebuttable presumption of illegality, balancing enforcement efficiency with substantive justice. The scope of responsible parties should be expanded to include algorithm designers, providers, and users, with responsibility prioritized based on subjective intent. The determination of illegality should revert to the substantive criteria for monopoly agreements, thereby refining the regulatory pathway. This approach aims to curb the damage to market competition caused by the abuse of algorithms, balance innovation vitality with competitive order, and establish a solid institutional foundation of fair competition for the high-quality development of the digital economy.

Keywords

Hub-and-Spoke Agreement; Anti-Monopoly Law; Algorithmic Collusion

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