Alibaba, Meituan paid the bulk of China’s US$3 billion antitrust fines in 2021, report shows

  • The State Administration for Market Regulation collected 23.6 billion yuan (US$3.53 billion) in fines in 2021, about 52 times the 450 million yuan received in 2020
  • Authorities say they have achieved “important results” in disciplining monopolistic behaviours and will now focus on restoring market confidence

E-commerce giant Alibaba Group Holding and on-demand service platform operator Meituan together contributed 92 per cent of the antitrust fines handed out in China last year, according to an annual report published this week by the State Anti-Monopoly Bureau.

Authorities collected 23.6 billion yuan (US$3.53 billion) in antitrust fines in 2021, about 52 times the 450 million yuan received in 2020, according to the report.

The hefty increase came mainly from two sources – the unprecedented 18.2 billion yuan fine given to Alibaba for its monopolistic practices, and a 3.4 billion yuan fine given to Meituan over similar misconduct.

The watchdog said it closed 175 cases last year, a jump of 61.5 per cent from a year earlier, when the antitrust bureau was still an internal department within the State Administration for Market Regulation (SAMR).

The antitrust investigations on China’s Big Tech firms and their corresponding fines formed a major part of Beijing’s regulatory crackdown that was meant to curb the “irrational expansion of capital” in the tech sector.

Alibaba, owner of the South China Morning Post, and Meituan were accused of forcing merchants to sign exclusive deals with their respective platforms in a practice known as “picking one from two”, which is punishable under China’s antitrust laws.

Other Chinese tech giants, including social media and video gaming company Tencent Holdings, TikTok owner ByteDance and ride-hailing firm Didi Global, were also fined in the same year for failing to report their merger and acquisition deals for antitrust reviews. Some of those deals were completed before the antitrust bureau’s formation within the SAMR.

The State Anti-Monopoly Bureau said on Tuesday it had achieved “important results” in disciplining monopolistic behaviours and would now focus on restoring market confidence, in a fresh signal that the intense clampdown on the tech sector is largely over.

“The anti-monopoly regulation of the platform economy sends a strong signal that the internet is not a place outside the law. The rules strongly promote the standardised, orderly, sustainable and healthy development of the platform economy,” the bureau said.

This comes as the Chinese government has been ramping up efforts to stimulate the ailing economy wounded by stringent Covid-19 control measures. In Beijing’s most powerful sign of support for the tech industry, China’s top leadership met Big Tech executives last month to assure them that regulations would be predictable and transparent going forward.

The State Anti-Monopoly Bureau said it would uphold regulations in some areas, without elaborating on which areas they would be.

On Tuesday, the SAMR also released new guidance regarding “online promotion events” during the June 18 midyear shopping festival, which is taking place on popular e-commerce sites such as JD.com and Alibaba’s Taobao. Authorities said they would keep their eye on platforms and merchants to root out problematic products and unlawful advertisements.

Author: Jiaxing Li, SCMP

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