China Fines Alibaba, JD.com, Vipshop Over Pricing Complaints
December 30 2020 - 10:41AM
Dow Jones News
By Chong Koh Ping
China has fined operators of three major e-commerce platforms,
including Alibaba Group Holding Ltd. and JD.com Inc., $76,600 each
for mispricing products, the latest in the barrage of regulatory
actions targeting the increasingly influential internet sector.
Beijing's State Administration for Market Regulation said
Wednesday it investigated the three platforms -- Alibaba's Tmall
Supermarket, JD.com and Vipshop Holdings Ltd. -- after receiving
complaints from consumers.
The consumers accused these platforms of raising prices of
products before offering discounts during a major shopping festival
in November, which made it look like they were getting a better
bargain then they actually were, according to the regulator. The
platforms were also involved in making false promotions and
employing bait-and-switch tactics, the regulator said.
Alibaba declined to comment. JD.com and Vipshop Holdings didn't
immediately respond to requests for comment.
While the fines were nominal for the companies, they serve as a
warning to them and the broader internet sector. In recent months,
China has been amping up its scrutiny of the powerful technology
sector that has amassed vast amounts of user data.
That campaign has so far hit billionaire Jack Ma hardest, along
with the two companies he founded -- Alibaba and fintech giant Ant
Group.
In early November, Beijing scuttled Ant's blockbuster initial
public offering that had been on track to raise at least $34.4
billion. That came after Mr. Ma, the controlling shareholder of
Ant, criticized President Xi Jinping's risk-control initiative,
while also slamming regulators for stifling innovation. On Sunday,
regulators ordered Ant to refocus its attention on its original
payments business, while the more profitable investment and loan
businesses would be curtailed.
Meanwhile, regulators last week launched an antitrust probe into
Alibaba, which owns a third of Ant, for allegations that the
company has used its dominant market position to pressure merchants
to sell only on its platforms. The Chinese government is seeking to
shrink Mr. Ma's empire and potentially take a larger stake in his
businesses.
China also introduced a set of new draft antitrust guidelines
for the technology industry last month, seeking to regulate new
internet consumer trends.
--Liza Lin contributed to this article.
(END) Dow Jones Newswires
December 30, 2020 10:26 ET (15:26 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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