Unfinished 'Ma Yun Criticism' in China... 260 Million KRW Fine Imposed on Alibaba Subsidiary

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] An Alibaba affiliate has been fined again by Chinese authorities. This is the second time this year.

According to Caixin on the 28th, China's antitrust agency, the State Administration for Market Regulation, announced that it would impose a total fine of 1.5 million yuan (about 260 million KRW) on Sohuuituan, an Alibaba-affiliated regional group buying platform, for unfair pricing practices detected the day before.

The administration stated that Sohuuituan's sale of pears and salt products, which had purchase costs of 3.89 yuan and 0.57 yuan respectively, at prices of 0.99 yuan and 0.1 yuan constituted dumping prohibited by the Price Law, and imposed a fine of 1 million yuan.

Additionally, a separate fine of 500,000 yuan was imposed because it was confirmed that Sohuuituan deceived consumers with false discount information, such as advertising a high-end liquor Wuliangye, which costs 1,199 yuan, as being sold at 1,199 yuan when the original price was 2,999 yuan.

Furthermore, the authorities also issued a three-day business suspension order.

In March, the administration had also fined five major food group buying platforms in China, including Sohuuituan and Pinduoduo affiliate Duoduomai Cai, Meituan affiliate Meituan Youshuan, Didi Chuxing affiliate Qingshen Youshuan, and Tencent affiliate Sxhnghui, with fines ranging from 500,000 to 1.5 million yuan for dumping sales and other reasons.

On the 26th, the Chinese State Council held a commerce meeting chaired by Premier Li Keqiang, stating that "enforcement of antitrust laws will be strengthened" and that "companies with dominant market positions that maliciously provide subsidies to consumers or engage in dumping sales to increase market share will be identified."

Caixin evaluated that "this recent government stance shows that the high-level authorities remain committed to strengthening antitrust supervision over internet platform companies."

Since Alibaba founder Jack Ma openly criticized the authorities' regulations as "outdated" at a public event last October, Chinese authorities have been disciplining the "internet giant" companies under various pretexts such as antitrust, financial stability, and personal information protection, with Alibaba becoming a "test case."

This content was produced with the assistance of AI translation services.