China’s second-largest e-commerce company JD.com Inc said it has sent a letter of complaint to a Chinese anti-trust regulator and formally requested an investigation into rival Alibaba Group Holding Ltd.
Reuters reports that the complaint concerns a State Administration for Industry and Commerce (SAIC) regulation which forbids ecommerce platforms from limiting or barring their merchants from participating in promotions on other platforms. The regulation came into effect on October 1st.
Alibaba dominates Chinese e-commerce. If the SAIC does launch an investigation and finds the company has violated its position, it could be punished according to the country’s laws governing anti-trust and unfair competition.
JD.com said in its letter it had received information from merchants indicating that Alibaba was “forcing merchants” to choose to exclusively deal with one ecommerce site during promotional activities.
If merchants choose to participate in certain promotional activities on Alibaba’s Tmall website during the upcoming Singles’ Day online shopping event around Nov 11, they “are not permitted” to participate in other platforms activities, otherwise “Alibaba will carry out punishment or sanctions”,
According to JD.com, Alibaba’s behaviour has “harmed merchants’ interests”, and “not only obstructed normal market competition, but also seriously harmed consumers’ interests”.