China’s antitrust chief declares early victory in taming ‘one from two’ practice in the wake of Alibaba, Meituan fines

  • According to Gan Lin, ‘monopolistic behaviours by platforms’ and ‘disorderly competition’ have lessened
  • Comments suggest that the antitrust watchdog is unlikely to initiate fresh investigations or issue hefty fines for the practice in the near term

The chief of China’s newly upgraded Anti-Monopoly Bureau has declared an early victory in getting rid of the once-widespread monopolistic practice of “picking one out of two” merchants within the e-commerce sector, after the bureau’s earlier imposition of hefty fines on Alibaba Group Holding and Meituan for this offence.

Gan Lin, deputy head of China’s State Administration for Market Regulation (SAMR), said in an interview with the Chinese Discipline Inspection and Supervision Daily, an official paper run by China’s anti-graft agency, that the practice whereby small merchants were forced to pick only one internet platform as their online store, has “basically disappeared”.

The comments, published on Sunday, came after Gan’s bureau reviewed the performance of different e-commerce platforms during China’s online shopping festivals around June 18 and November 11.

Gan’s comments suggest that the antitrust watchdog is unlikely to initiate fresh investigations or issue hefty fines for the practice in the near term.

The antitrust agency imposed a record fine of 18.2 billion yuan (US$2.8 billion) on Alibaba in April for monopolistic behaviours, including forcing merchants to pick Alibaba as their sole e-commerce platform, following a probe initiated last Christmas Eve. The regulator also fined food delivery and local services giant Meituan 3.44 billion yuan in October for the “pick one from two” practice.

According to Gan, “monopolistic behaviours by platforms” and “disorderly competition” have been lessened. Gan said that the regulator would strictly review mergers and acquisitions by platform companies in future to prevent them from gobbling up start-ups.

Gan, who was appointed in November as chief of the antitrust bureau at the SAMR, said the regulator had probed and prosecuted 345 monopoly cases and 1,920 cases of business concentration spanning the platform economy, medicine, public utilities, building materials, and automobiles over the past three years.

Gan said the regulator would push ahead with its revisions to the 2008-enacted China Antitrust Law, which is currently subject to approval by China’s legislature.

Author: Che Pan, SCMP

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