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Chinese e-commerce giant JD.com [JD:US] has won an anti-monopoly lawsuit against its major rival Alibaba [BABA:US], which was ordered by a Beijing court to pay JD.com RMB1bn (USD141m) in compensation, as reported by the South China Morning Post on December 29. The court ruled that Alibaba’s Tmall platform has abused its market dominance by imposing the monopolistic tactic known as “picking one from two”, causing significant harm to JD.Com. The “Picking one from two” tactic is a common practice used by Chinese e-commerce giants to force online vendors to choose only one platform as their exclusive distribution channel.
JD.com applauded the court’s ruling, asserting that Alibaba’s monopolistic practices have impeded fair market competition and hurt the rights of brands, merchants, and consumers. The legal dispute originated in 2017 when JD.com filed a lawsuit against Alibaba, challenging its exclusivity clauses. In response, China’s antitrust watchdog, the State Administration for Market Regulation (SAMR), launched an antitrust investigation into Alibaba in December 2020. The SAMR concluded the investigation in April 2021 with a record RMB18.2bn (USD2.8bn) penalty on Alibaba and ordered the firm to rectify its misconduct. The SAMR determined that Alibaba had abused its market dominance in China’s online retail market since 2015 by forcing online merchants to exclusively open stores and participate in promotions on its platform. In October 2021, the regulator also implemented a RMB3.4bn (USD527.4m) antitrust penalty on Chinese delivery giant Meituan [3690:HK] for forcing vendors to operate on its platform exclusively.
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