South China Morning Post
China’s market regulator has fined some of the country’s largest tech players involved in a fast-growing e-commerce model for slashing prices to edge out competitors, in Beijing’s latest move to rein in China’s Big Tech. Alibaba Group Holding-backed start-up Nice Tuan and the community group buying units under e-commerce platform Pinduoduo, ride-hailing firm Didi Chuxing and online delivery company Meituan were each fined 1.5 million yuan (US$232,000) for breaching the country’s price law, while a start-up backed by Tencent Holdings, Shixianghui, was fined 500,000 yuan, the State Administration for Market Regulation (SAMR) said in a statement on Wednesday. (Alibaba owns the South China Morning Post .)Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China. “During the second half of 2020, some community group buying businesses used their capital advantage to launch substantial price subsidies, disturbing market price order and arousing widespread concerns from society,” authorities said. Representative from Pinduoduo and Meituan’s community group buying units confirmed that they have been notified about the punishment. “The company attaches great importance to the issue and will rectify according to the requirements of relevant regulatory authorities,” a Pinduoduo spokesman said. “We attach great importance to and sincerely accept the punishment. We will strengthen rectification,” a Meituan spokesman said. A representative from Nice Tuan also said the company is working to address the issue. “We have formed a special team immediately to conduct self-examination and comprehensive rectification on the issues involved,” the spokesman said. “We will strictly implement relevant laws and regulations, and while providing users with a high-quality service experience, we will do our best to protect the legitimate rights and interests of consumers.” Didi Chuxing and Shixianghui did not immediately respond to requests for comment. Community group buying is an emerging business model that enables residents in a community to purchase groceries and other daily essentials in bulk through a leader appointed by e-commerce platforms. The large-volume purchases allow merchants to offer steep discounts, which have attracted deal-seeking consumers across China. Tech giants and start-ups alike have flocked to introduce their own services. The new trend, however, has been accused of hurting the livelihoods of millions of people working in China’s traditional wholesale and retail networks. In December, the Communist Party mouthpiece People’s Daily published an opinion piece questioning whether it was “morally sound” for China’s Big Tech to chase profits by “selling a few cabbages”. Soon after, antitrust regulators summoned Alibaba, Tencent, Meituan, Pinduoduo, Didi Chuxing and JD.com to warn them on the issue of “low price dumping and squeezing jobs” in community group buying. On Wednesday, the SAMR accused Didi Chuxing’s Chengxin Youxuan, Pinduoduo’s Duoduo Maicai, Meituan’s Youxuan, Nice Tuan and Shixianghui of using false or misleading price methods to trick consumers into buying from them. In December, SAMR fined a subsidiary of e-commerce giant Alibaba Group Holding, a unit of social-media and gaming juggernaut Tencent Holdings, and an affiliate of express delivery company SF Holding 500,000 yuan each for a breach of China’s anti-monopoly law.More from South China Morning Post:Big Tech set for starring role at Beijing’s ‘two sessions’ political gala amid regulatory heat and US tech warCommunity group buying has brought Big Tech’s disruption to China’s smaller cities but are they ready for it?China antitrust: Beijing’s new rule book raises the bar for what counts as a monopolyChina issues final version of anti-monopoly guidelines as Beijing moves to rein in Big TechChina antitrust: Beijing signals that antimonopoly action will play key role in developing a ‘high-standard’ market systemThis article Community group buying: Chinese regulators fine businesses tied to Big Tech for price dumping first appeared on South China Morning PostFor the latest news from the South China Morning Post download our mobile app. Copyright 2021.