THE country’s top market regulator yesterday imposed administrative penalties on five leading community group-buying platforms owned or backed by the likes of Meituan, Pinduoduo, Tencent Holdings, Alibaba Group and Didi Chuxing, quoting “improper pricing behavior” that disrupted market order.

The State Administration of Market Supervision said it had decided to fine the registered firms behind Chengxin Youxuan, a community group-buying platform under China’s ride-hailing giant Didi, Duo Duo Maicai owned by e-commerce platform Pinduoduo, Meituan Youxuan under online platform Meituan and Nicetuan 1.5 million yuan (US$230,000) each, and that of Wuhan-based group-buying platform Shixianghui 500,000 yuan.

Nicetuan and Shixianghui respectively count Alibaba and Tencent as investors.

These platforms had since the second half of 2020 took advantage of the size of their funds to launch massive price subsidies which disrupted market order, the regulator said. Some of them also used false or misleading price tactics to “trick” consumers into buying from them, it added.

Some of these community group-buying companies dumped products at prices below cost to squeeze out competitors or monopolize the market, harming the legitimate rights and interests of other market players and violating the country’s price law, the regulator said.

In China, community group buying refers to a practice of allowing groups of local residents to get discounts by buying together in bulk. It attracted attention from the regulator late last year who said Internet platforms were competing for market share with unreasonably low prices.

China has vowed to strengthen oversight of its big tech firms, which rank among the world’s largest and most valuable, citing concerns that they have built market power that stifled competition, misused consumer data and violated consumer rights.

(SD-Xinhua)