In a landmark ruling on Friday, the Beijing High People’s Court declared Chinese e-commerce giant JD.com victorious in an antitrust lawsuit against its main rival, Alibaba Group Holding. The court ordered Alibaba to pay 1 billion yuan (US$141 million) in damages, marking a significant turn in the ongoing battle between the two tech giants.
The legal saga unfolded over more than two years, stemming from an antitrust investigation initiated in December 2020 against Alibaba for alleged monopolistic practices. The investigation led to a record 18.2 billion yuan fine imposed on Alibaba by market regulators in April 2021. The recent ruling builds upon this, with the Beijing High People’s Court determining that Alibaba had “abused its market dominance” through the monopolistic tactic known as “picking one from two.”
The controversial practice, whereby online merchants are compelled to choose a single platform as their exclusive distribution channel, had been prevalent in China’s e-commerce market for years. JD.com argued that such tactics hinder market competition and adversely affect the rights of brands, merchants, and consumers. The court’s statement, released on the same day as the ruling, supported JD.com’s claim, asserting that Alibaba’s actions caused damage to JD.com’s business.
JD.com, China’s second-largest e-commerce player, initially filed the lawsuit in 2017, approximately two years after officially complaining to China’s State Administration for Industry and Commerce against Alibaba for unfair competition. The State Administration for Market Regulation (SAMR) conducted a months-long inquiry into Alibaba’s practices, concluding in April 2021 with the hefty fine and a mandate for Alibaba to rectify its misconduct.
Alibaba, which owns the South China Morning Post, responded to the court’s decision by stating that it had been informed of the judgment and respects the ruling. The legal clash between JD.com and Alibaba takes place against the backdrop of an intensifying rivalry in China’s e-commerce market, where both companies are also contending with newer challengers like budget online retailer Pinduoduo and live-streaming shopping platform Douyin, owned by TikTok parent ByteDance.
JD.com welcomed the court’s ruling, emphasizing its commitment to fostering fair competition in the market and advocating against monopolistic practices that hinder the growth of brands, merchants, and the overall e-commerce ecosystem in China.