Chinese e-commerce giant JD.com wins antitrust lawsuit against Alibaba, which was ordered by a Beijing court to pay US$141 million in damages

The Beijing High People’s Court on Friday ruled that Alibaba ‘abused its market dominance’, using the tactic known as ‘picking one from two’
JD.com asserted that monopolistic practices have hampered competition in China’s e-commerce market and hurt the rights of merchants and consumers

E-commerce

Iris Dengin Shenzhen

Published: 10:04pm, 29 Dec 2023

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Chinese e-commerce giant JD.com said it won an antitrust lawsuit against main rival Alibaba Group Holding, which was ordered by a Beijing court to pay 1 billion yuan (US$141 million) in damages, more than two years after the Taobao and Tmall operator was slapped with a record fine by market regulators for its monopolistic practices.

The Beijing High People’s Court on Friday ruled that Alibaba, owner of the South China Morning Post, “abused its market dominance” and conducted the monopolistic tactic known as “picking one from two”, which caused damage to JD.com’s business, according to a statement released on the same day by the Beijing-based online retailer.

JD.com hailed the court’s ruling, as it asserted that monopolistic practices, such as “picking one from two”, have hampered market competition and hurt the rights of brands, merchants and consumers.

That tactic, in which online merchants are forced to choose only one platform as their exclusive distribution channel, had been a common practice for years in China’s e-commerce market until it triggered an antitrust investigation against Alibaba in December 2020.

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China kicks off antitrust probes into Alibaba over alleged monopolistic practices

Alibaba said it was informed of the judgment and respects the court’s ruling, according to a company spokeswoman on Friday.

The conclusion of that lawsuit comes amid the escalating rivalry between JD.com and Alibaba in the domestic e-commerce market, where the two firms are also trying to fend off younger challengers such as budget online retailer Pinduoduo, operated by PDD Holdings, and live-streaming shopping platform Douyin, owned by TikTok parent ByteDance.

JD.com, China’s second-largest e-commerce player, filed the lawsuit in 2017, about two years after it made an official complaint to China’s State Administration for Industry and Commerce against Alibaba for unfair competition and called for an investigation.

The months-long inquiry by antitrust watchdog the State Administration for Market Regulation (SAMR) on Alibaba’s practices concluded in April 2021, when the company was slapped with a record 18.2 billion yuan fine and ordered to correct its misconduct.

JD.com, Alibaba’s Taobao push ‘refund only’ policy to rival Pinduoduo’s strategy

At the time, the SAMR said Alibaba had “abused its dominant market position in China’s online retail platform service market since 2015” by forcing online merchants to exclusively open stores and take part in promotions on its domestic shopping platforms.

Earlier this week, both JD.com and Alibaba’s Taobao platform rolled out a “refund only” policy so consumers can keep the goods they had bought but later complained about – matching an option that Pinduoduo has had in place since 2021.

JD.com on Wednesday announced that it will nearly double the salary for frontline employees, including those in procurement and sales from January 1. Staff at its retail unit will receive an average raise of 20 per cent or more by early next year.