Alibaba, Meituan units summoned by Chinese regulator for ‘unfair competition’ during Singles’ Day festival

A local market watchdog summoned 16 e-commerce platform operators – including a branch under Alibaba Group Holding, Meituan’s group-buying business, and Vipshop – to warn them against “unfair competition” activities and other business malpractice, as Beijing’s ongoing antitrust crackdown weighs on Big Tech companies during this year’s Singles’ Day festival.

In a meeting last Friday, the Guangdong Administration for Market Regulation accused the companies of various irregularities including selling fake products, false advertising and poor after-sales services, according to a report published on Tuesday by state-run China Central Television (CCTV).

The agency issued a set of guidelines for the offending platforms, requiring them to establish a compliance management system, handle consumer complaints in a timely manner, protect consumers’ personal information, and refrain from false or illegal advertising. The companies were also asked to avoid banning or restricting merchants from taking part in promotional activities organised by rival platforms.

The rules align with a message last month from the Ministry of Industry and Information Technology, one of China’s leading internet watchdogs, which has routinely called on businesses to protect consumer rights during Singles’ Day. In this year’s meeting, Alibaba, JD.com, Meituan and several telecommunications companies were asked to tackle the issue of excessive marketing messages received via SMS during the annual shopping spree.

Meituan, Vipshop and South China Morning Post owner Alibaba did not respond to requests for comment on Wednesday.

This comes as traditional e-commerce platforms in China are doubling down on their efforts to woo customers in the world’s largest online shopping extravaganza amid rising competition from new entrants.

This year’s Singles’ Day is also the first since Beijing slapped a record US$2.8 billion fine on Alibaba in April for monopolistic behaviour, including forcing merchants to choose Alibaba’s platforms as their exclusive distribution channel. In early October, Meituan was hit with a US$533 million fine for abusing its dominant market position through similar practices.

During the first wave of Singles’ Day presales this year, which took place from October 20 to 31, Alibaba’s Tmall grew its gross merchandise value by more than 50 per cent from a year earlier to surpass 80 billion yuan (US$12.5 billion), according to research firm Yipitdata. Rival JD.com said it sold 190 million products in the first four hours of its Singles’ Day promotion on October 31.

Separately, the consumer council in Zhejiang province recently summoned nine video and audio streaming platforms – including Tencent Video, Baidu-backed iQiyi and Alibaba’s Youku – asking them to fix a range of irregularities including unclear descriptions of membership privileges and automatic membership renewals, and submit a rectification report by Friday, according to a report from state-run Chinanews.com published on Tuesday.

Author: Jane Zhang, SCMP