In a significant legal development, Chinese online retailer JD.com emerged victorious in an antimonopoly lawsuit against its rival Alibaba. The High People’s Court of Beijing ruled that Alibaba Group Holding Limited, along with Zhejiang Tmall Network Co and Zhejiang Tmall Technology Co, engaged in monopolistic practices known as ‘choosing one from two,’ causing substantial damage to JD.com. The court imposed a fine of 1 billion yuan ($140.68 million) on Alibaba for its anticompetitive behavior.
The Court’s Verdict
According to JD.com’s statement published on its official WeChat account, the court found that Alibaba and its affiliated companies abused their market dominance, adversely impacting JD.com. The ruling underscores the gravity of the ‘choose one out of two’ monopoly, marking a landmark moment in upholding market fairness and competition order through the rule of law. JD.com sees this decision as a crucial step in China’s anti-monopoly legal process.
Reaction from JD.com and Alibaba
JD.com, while welcoming the court’s decision, stated that it had nothing more to add beyond the official statement. The company sees the ruling as not just a victory for JD.com but as a broader triumph for market fairness.
Alibaba, on the other hand, acknowledged the ruling and expressed respect for the court’s decision. This comes after Alibaba faced a record $2.75 billion fine in 2021 in an anti-trust probe by Chinese regulators, which highlighted the company’s abuse of market dominance.
Background: ‘Choosing One Out of Two’ Practice
The legal dispute revolves around the practice known as ‘choosing one out of two,’ where both JD.com and Alibaba accused each other of enforcing exclusivity on brands and merchants. This practice dictated that brands and merchants had to operate exclusively on one platform, leading to accusations of anticompetitive behavior.
The court’s decision is expected to have far-reaching implications for the e-commerce landscape in China, setting a precedent for fair market practices and competition.
