China’s second largest eCommerce company, JD.com, is locking horns with its rival competitor, Alibaba, over antitrust issues just a week before Single’s Day, which marks the world’s biggest online shopping event.
JD.com has filed a complaint to the Chinese antitrust regulator — the State Administration for Industry and Commerce (SAIC). The company has alleged that Alibaba violated a SAIC regulation which forbids eCommerce companies from barring merchants from promoting their business on other platforms, according to Reuters. The regulation reportedly came into effect on Oct. 1 this year.
In a letter sent to SAIC, JD.com has cited several sellers on its website who reported that Alibaba’s Tmall is forbidding merchants promoting on its site from participating in activities on any of its rival platforms. Otherwise, “Alibaba will carry out punishment or sanctions,” JD.com said.
While Alibaba initially tried to play it cool with Senior VP of International Corporate Affairs Jim Wilkinson saying, “JD is panicking because Alibaba wins with customers and merchants because we provide a superior experience for users on our platforms.” The company rebuked the allegations. “We strongly deny the accusations,” Alibaba spokesman Rico Ngai said. “Alibaba welcomes competition as it benefits consumers, merchants and service providers.”
While it won’t be Alibaba’s first brush with SAIC, if the regulator decides to go ahead with its investigation, it might bring some damage to the company with Single’s Day just around the corner.
In its last altercation, Alibaba reportedly lost over 8 percent of share value after SAIC published a whitepaper that lampooned the company for not trying hard enough to stop the sale of counterfeit products on its website. Though SAIC later withdrew the whitepaper, it did prove to be a distasteful road bump for Alibaba. According to Reuters, the company later said it felt “vindicated.”
The importance of Single’s Day sales to Alibaba can also be estimated by the fact that company sales surpassed $9 billion last year, and so an SAIC investigation right now is probably the last thing the company needs as a distraction from its goal. Last year, the Hangzhou, China-based company was slapped with a fine of 800,000 yuan, or $126,268.60, for third-party violations during the event promotions, Reuters reported.
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