JD.com wins lawsuit against Alibaba in Chinese court

JD.com wins lawsuit against Alibaba in Chinese court

In an interesting development in the very lucrative and competitive online shopping market in China, JD.com has reportedly won a lawsuit against rival Alibaba Group in the High People’s Court of Beijing.

The court fined Alibaba 1 billion yuan (about US$140 million) for engaging in what are described as  monopolistic practices.

When it sued Alibaba and its e-commerce divisions, Zhejiang Tmall Network and Zhejiang Tmall Technology, JD.com apparently accused them of adopting a stance that said to suppliers that if they sold to JD.com, they would not be allowed to sell on Alibaba; it’s called a ‘choose one of two’ behaviour.

A widely reported JD.Com statement called the judgment “a landmark moment for the rule of law to maintain the order of fair competition in the market”. The lawsuit was initiated by JD.com in 2017 to challenge the exclusivity requirement of Alibaba.

According to the Retail TouchPoints website, other China-based online traders forced to go to court (this time in the US) include e-commerce app Temu, an online marketplace that is accusing fast fashion retailer Shein of using ‘mafia-style tactics’ to coerce sellers into exclusive relationships with Shein.

Aibaba has been penalised already. In 2021, it was fined a record US$2.75 billion by Chinese regulators who said the company had abused its market dominance. In addition Alibaba’s fintech firm Ant Group was fined approximately US$982 million in July 2023 for violating consumer protection and corporate governance regulations.

JD.com and Alibaba are vast concerns, both of them said to be among the world’s top ten publicly traded tech companies by revenue.

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