February 13, 2015 / 10:53 AM / 5 years ago

Chinese regulator says to target e-commerce pricing behavior

BEIJING (Reuters) - A Chinese antitrust regulator said on Friday pricing tactics in the nation’s e-commerce sector will be probed to ensure a “fair” market, likely putting new scrutiny on companies such as Alibaba Group Holding Ltd and JD.com Inc.

People play in a hall inside Alibaba's headquarters in Hangzhou, Zhejiang province, in this file photo taken on April 23, 2014. REUTERS/Chance Chan

The comments come just two weeks after another government regulator, the State Administration for Industry and Commerce (SAIC), accused Alibaba of failing to clean up what it called illegal business deals on the e-commerce titan’s platforms. However, the regulator later retracted its report.

The National Development and Reform Commission (NDRC) said in a statement on its website that it would “organize and develop special inspections into the online retail sector’s pricing behavior”.

This will include cracking down on activity like falsely inflating goods’ prices before dropping them again as a fake special offer, the statement from the agency’s pricing supervision and antitrust bureau said.

The NDRC said it will also focus on pricing around holidays, which are often used by Chinese e-commerce firms and their merchants to drop prices and shift huge quantities of goods. The statement did not name any firms regarding the inspection.

The annual Singles’ Day, which falls in November, is the world’s largest online shopping event. Alibaba alone said last November it saw over $9 billion in transactions cross its online shopping platforms within 24 hours.

But the festival has also been the subject of other regulators’ scrutiny.

Last November, Chinese media reported that the SAIC took aim at 10 of China’s biggest e-commerce firms over pricing issues similar to those the NDRC has said it will probe.

An Alibaba spokeswoman said by email the firm welcomes measures to help it achieve “a fair and equitable marketplace for buyers and sellers”.

A JD.com spokesman said by email: “JD.com prides itself on providing the best customer experience in China, from authentic products to fully transparent pricing on sales events.

“We support efforts to make it easier for consumers to be confident in the level of discounts and quality of goods they are receiving.”

The NDRC has emerged as one of the foremost players in China’s high-profile antitrust investigations into businesses from auto parts makers and milk powder producers to drugs firms and tech companies like Qualcomm Inc.

Friday’s statement is the latest sign that the NDRC’s antitrust division could continue to expand the scope of its enforcement.

On Monday, Qualcomm said it had agreed to pay a fine of $975 million, the largest in China’s corporate history, ending a 14-month NDRC investigation into anti-competitive practices.

Reporting by Paul Carsten and Michael Martina; Editing by Muralikumar Anantharaman

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