Community group buying: Chinese regulators fine businesses tied to Big Tech for price dumping
- The State Administration for Market Regulation accuses tech giants involved in community group buying of price dumping in a bid to dominate the market
- The latest crackdown on Big Tech comes ahead of Beijing’s key political meeting known as the ‘two sessions’
China’s market regulator has fined some of the country’s largest tech players involved in a fast-growing e-commerce model for slashing prices to edge out competitors, marking Beijing’s latest move to rein in China’s Big Tech sector.
Alibaba Group Holding-backed start-up Nice Tuan and the community group buying units under e-commerce platform Pinduoduo, ride-hailing firm Didi Chuxing and online delivery company Meituan were each fined 1.5 million yuan (US$232,000) for breaching the country’s price law, while a start-up backed by Tencent Holdings, Shixianghui, was fined 500,000 yuan, the State Administration for Market Regulation (SAMR) said in a statement on Wednesday. Alibaba owns the South China Morning Post.
“During the second half of 2020, some community group buying businesses used their capital advantage to launch substantial price subsidies, disturbing market price order and arousing widespread concerns from society,” authorities said.
Representative from Pinduoduo and Meituan’s community group buying units confirmed that they have been notified about the punishment.
“The company attaches great importance to the issue and will rectify according to the requirements of relevant regulatory authorities,” a Pinduoduo spokesman said.
“We attach great importance to and sincerely accept the punishment. We will strengthen rectification,” a Meituan spokesman said.
A representative from Nice Tuan also said the company is working to address the issue.