In December 2020, the State Administration for Market Regulation filed an investigation against Alibaba Group Holding Co., Ltd. (hereinafter referred to as Alibaba Group) for abusing its dominant market position in the online retail platform service market in China in accordance with the Anti-Monopoly Law.
According to the investigation, Alibaba Group has a dominant position in the online retail platform service market in China. Since 2015, alibaba group, the dominant market position, abuse within the platform on merchants "alternative" request, ban merchants set up shop in other competitive platform or platform to participate in promotional activities, and with the help of the rules of market forces, platform and data, algorithms and other technical means, take a variety of rewards and punishments measures to guarantee execution "alternative" requirement, Maintain and enhance their own market power and gain unfair competitive advantages.
The investigation shows that Alibaba Group's implementation of the "one or the other" behavior excludes and limits the competition in the service market of online retail platforms in China, impedes the free circulation of goods, services and resources, affects the innovative development of platform economy, infringes the legitimate rights and interests of merchants on the platform, and damages the interests of consumers. Paragraph 1 (4) of Article 17 of the Anti-Monopoly Law prohibits the abuse of dominant market position by "limiting the counterparty to trade with the counterparty without justifying reasons".
In accordance with the provisions of Article 47 and Article 49 of the Anti-Monopoly Law, and taking into account the nature, extent and duration of Alibaba Group's illegal acts, the State Administration for Market Regulation made an administrative punishment decision on April 10, 2021, ordering Alibaba Group to cease its illegal acts. It also imposed a fine of 4 percent of its 2019 sales in China of 455.712 billion yuan, totaling 18.228 billion yuan. At the same time, in accordance with the principle of combining punishment with education in the Administrative Punishment Law, it issued the Administrative Guidance to Alibaba Group, requiring it to make comprehensive rectification in strictly implementing the main responsibility of enterprises on the platform, strengthening internal control and compliance management, maintaining fair competition, and protecting the legitimate rights and interests of merchants and consumers on the platform. In addition, it has submitted self-inspection compliance reports to the State Administration of Market Supervision for three consecutive years.
AFD China Newsletter is intended to provide our clients and business partners information only. The information provided on the newsletter should not be considered as professional advice, and should not form the basis of any business decisions.