INTERNET CRACKDOWN

Chinese e-commerce giant JD slapped with 100s of fines as Beijing cracks down

PUBLISHED : Friday, 26 June, 2015, 5:37pm
UPDATED : Friday, 26 June, 2015, 5:37pm

JD.com, China’s No. 2 e-commerce platform, has received over 277 fines worth a total of 3 million yuan (US$480,000) over the last three years for false advertising and other charges, according to reports by Chinese media.

The fines, issued by several authorities in Beijing, also included those levied against JD for breaking unfair competition rules.

The e-commerce giant was slapped with a 500,000 yuan fine this month for pricing violations relating to a complaint lodged against it in August, the Beijing Municipal Commission of Development and Reform told the Post.

A customer noticed the site was offering a 50 per cent discount for Burberry bags, but that the reference price had been grossly inflated. 

“JD.com’s success is built on honesty and trust,” the company said in a statement.

“The issues mentioned are unrelated to the quality of our products, or the prices our customers pay for items on our site.”

“The vast majority of these issues relate to incomplete or imprecise information in product listings placed by our marketplace sellers.”

It said it took “immediate steps” to rectify the listings in question when it was notified of the problem last summer, and that the situation has long been resolved.

JD has faced several accusations of unfair competition this year.

In April, one of its employees reportedly approached a merchant on the site and offered to provide fake transactions in order to increase its ratings and reviews.

The employee was subsequently fired for violating company policy.

But it is not the only e-commerce platform in China to face controversy over the fairness of its business practices. 

Billionaire Jack Ma’s Alibaba, the market leader, was fined 800,000 yuan (US$129,000) in April for pricing violations committed between 2013 and 2015.

Some merchants on the group’s C2C shopping site Taobao, and B2C site Tmall, were found guilty of brushing, or generating false orders by paying people to pretend to be customers.

Alibaba responded by saying it does not tolerate such business practices, and penalizes merchants who engage in this or resort to other such nefarious tactics.

Earlier in January, the company came under fire from Beijing for permitting sales of counterfeit goods on its sites. It was also charged with bribery and accused of other illegal activities.

Alibaba now claims to have 2,000 employees working full-time to take down counterfeit listings on its e-commerce platforms.