Workers from JD.com track sales and trends for Singles’ Day at the company’s headquarters during an organised tour on November 11 in Beijing. Photo: Getty Images
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https://scmp.com/tech/policy/article/3115891/china-fines-tmall-jd-and-vipshop-price-irregularities-beijings-latest Policy
China fines Tmall, JD and Vipshop for price irregularities in Beijing’s latest swipe at e-commerce giants
- Tmall, JD and Vipshop were each fined 500,000 yuan over pricing irregularities, mirroring other recent fines levied against Chinese tech companies
- Big Tech companies are facing increasing regulatory scrutiny amid a new antitrust crackdown from Beijing
Singles’ Day is the biggest shopping festival in the world, but China’s market regulator is cracking down on participating companies over what it says are misleading deals promoting goods at higher-than-normal prices. Photo: Xinhua
China’s market watchdog said on Wednesday that it had fined the operators of Alibaba Group Holding’s Tmall, JD.com and Vipshop for pricing irregularities in November and early December.
The fines of 500,000 yuan (US$77,000) each, the maximum for price irregularities, are Beijing’s latest move in disciplining the country’s e-commerce giants.
The State Administration for Market Regulation made the decision to fine the three companies on December 24, the same day it announced an antitrust probe into Alibaba. It also came a week after it fined another Alibaba subsidiary, a unit of social-media and gaming juggernaut Tencent Holdings, and an affiliate of express delivery company SF Holding.
The fines, also for 500,000 yuan each, were over failures to report acquisitions of competitors. Alibaba is the owner of the South China Morning Post.
In the latest fines, the regulator said the administrative penalty is being imposed after consumers complained that the platforms raised prices before introducing discounts, engaged in fraudulent promotions and induced consumers into purchases during the Singles’ Day shopping festival on November 11.
The cited price irregularities are relatively small for all three companies.
JD was found to have nine pricing irregularities. In one case, JD priced a box of confectioneries at 149 yuan in a November 4 promotion, which wound up being 10 yuan more expensive than the day before, the regulator found.
In another case, JD promoted a bottle of edible oil for 73.8 yuan on November 9, but it cost 72.9 yuan on December 7, according to the regulator.
Tmall, an e-commerce platform run by Alibaba, was found to have 10 pricing irregularities. One involved a coffee machine that the platform said had a 40 per cent discount on its 599 price on December 4. However, the regulator determined there was no way to prove that was the original price.
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Amid pandemic, Chinese consumers spend US$74.1 billion during Singles’ Day online sales festival
Also on December 4, Tmall offered consumers two free facial masks with the purchase of a cosmetic product. Tmall said the masks were worth 74 yuan each, but the regulator said the actual price was 56.3 yuan that same day.
Vipshop, which runs the Vip.com e-commerce platform, was found to have seven price irregularities.
On November 27, the platform promoted a 199 yuan rice cooker as having “the lowest [price] across the whole internet”. But the regulator said Vipshop could not prove the claim was true.
In a similar case, Vipshop promoted a down jacket for 1,189 yuan on November 26, again claiming the lowest price on the internet. The company could not provide evidence of this claim either, the regulator said.
Tmall, an e-commerce platform run by Alibaba, was found to have 10 pricing irregularities. Photo: Reuters
The penalties were levied in accordance with the country’s Price Law and other pricing regulations.
The fines are the latest move in an ongoing regulatory crackdown aimed at Chinese tech giants.
In November, authorities released a draft for new antitrust guidelines targeting firms like Alibaba, JD and Pinduoduo just ahead of the Singles’ Day shopping festival, signalling policymakers’ growing concerns over what they see as monopolistic practices and unfair competition from internet platforms.
In response to the fine, Vipshop issued a statement saying that it will rectify its business practices in accordance with regulatory requirements. Tmall said on Thursday that it had already rectified the issues, adding that it would further strengthen its operations to better protect consumer rights. JD did not respond to a request for comment.