China proposes guidelines to punish unlawful e-commerce pricing

A lady checks her telephone as passengers arrive on the Beijing Railway Station in central Beijing, China February 1, 2018. REUTERS/Damir Sagolj/File Photograph

BEIJING, July 2 (Reuters) – China’s market regulator issued draft guidelines on Friday to punish unlawful pricing actions, together with heavy subsidies and the apply by on-line platforms of charging completely different costs based mostly on prospects’ buying behaviour.

The foundations are the newest in an effort by the State Administration for Market Regulation (SAMR) to rein in China’s free-wheeling platform economic system, which has seen it levy fines, launch investigations and concern warnings to booming e-commerce giants.

“The pricing practices have been widespread amongst on-line platforms and it’s a hidden downside to bizarre customers as a result of it is not very simple to note,” mentioned Lu Zhenwang, chief govt officer of Shanghai-based Wanqing Consultancy.

Customers over time have complained on social media that e-commerce platforms do not cost the identical worth for a similar choices.

Among the many practices banned within the guidelines proposed on Friday are subsidies that lower the worth of a product to under price.

Violation of the principles might incur a fantastic of 0.1% to 0.5% of a enterprise’ annual gross sales and even suspension of operations, SAMR mentioned.

In an April assembly with the market regulator within the southern metropolis of Guangzhou, platform corporations together with , Meituan (3690.HK), Alibaba’s (9988.HK) meals supply arm, (9961.HK) and Didi Chuxing (DIDI.N) pledged to not make the most of massive information to cost loyal prospects extra.

In March, state information company Xinhua reported that Alibaba’s on-line journey company Fliggy supplied completely different ticket costs for a similar flight, with extra loyal customers getting a better worth. In the identical article, Xinhua mentioned Meituan charged completely different costs for a similar pet care product.

Alibaba and Meituan didn’t instantly reply to requests for remark from Reuters on Friday.

In October, the Ministry of Tradition and Tourism imposed a rule banning the apply of differentiated pricing by on-line journey providers.

In April, SAMR fined Alibaba a document 18 billion yuan ($2.78 billion) for abuse of its dominant market place and introduced an antitrust investigation into Meituan.

($1 = 6.4808 Chinese language yuan renminbi)

Reporting by Sophie Yu, Yingzhi Yang, Tony Munroe in Beijing; Modifying by Andrew Heavens

Our Requirements: The Thomson Reuters Belief Rules.

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