China to Roll Out Antitrust Rule Ahead of Singles' Day Shopping Spree

November 11, 2020 1:45 am

Beijing (PingWest)—China’s State Administration for Market Regulation (SAMR) on Tuesday published draft rules aimed at preventing monopolistic behavior by Internet giants including Alibaba, Tencent, and Meituan.

The move comes after China’s Financial Stability and Development Committee, a cabinet-level body headed by Vice Premier Liu He, last month flagged the need to improve mechanisms to ensure fair competition and called for the strengthening of anti-monopoly law enforcement.

In the draft, the regulator declared that it wanted to prevent platforms from dominating the market or from adopting methods aimed at blocking fair competition.

 According to the draft, which was released just a day before the world's largest shopping festival Singles' Day (November 11), e-commerce practices such as "choose one between the two", which restrict the e-commerce market and restrict brands from selling on multiple platforms, will no longer be allowed.

Many competitors and businesses have accused Alibaba of adopting this approach on its platform before. Besides, at the beginning of this year, a lot of restaurant owners also accused Meituan of forcing businesses not to operate on other platforms. 

On November 6, three Chinese regulatory agencies, namely the State Administration for Market Regulation, the Central Cyberspace Administration, and the State Administration of Taxation, held a meeting, requiring major Internet companies to comply with laws and regulations and strengthen self-discipline to promote the healthy development of the online economy. Representatives of 27 companies including Alibaba, ByteDance, and Pinduoduo attended the meeting.

Previously, because the Chinese financial regulator believed that the profitable online lending business of Ant Group, the fintech arm of Alibaba, should be subject to stricter government scrutiny, its planned $37 billion share market listing was suddenly suspended.