Alibaba Fined $129K For Pricing Violations

Alibaba has gotten itself tangled in a pricing controversy with the Chinese government.

China’s top eCommerce company has been fined $129,000 (800,000 yuan) for pricing irregularities with its third-party vendors. The bulk of those fines ($81,000/500,000 yuan) stem from alleged violations of pricing regulations during Alibaba’s Singles’ Day, a promotional event that’s happened for the past six years on Nov. 11, Reuters reported.

The company was fined following investigations of Alibaba’s Singles’ Day events in 2013 and 2014, as well as investigation into various pricing strategies from separate promotions during 2013 and 2015 — which resulted in the remaining $48,000 (300,000 yuan) in fines. While the pricing of its third-party merchandise is handled by the vendors themselves, Alibaba is responsible for enforcing pricing rules and regulations. Reuter’s report indicated that Alibaba’s Singles’ Day featured 27,000 vendors on its site, but many vendors began complaining that the deep discounts were undercutting their business and creating unfair competition across the third-party vendors.

“While pricing by third-party sellers is done independent of Alibaba,” Alibaba said in a statement, according to The Wall Street Journal, “we will be reinforcing pricing rules and regulations with our sellers in our daily operations and emphasizing these rules well in advance of our 2015 Singles’ Day activities.”

Alibaba’s Singles’ Day generated $9.3 billion in sales, which holds the record for single-day sales from an eCommerce company. The eCommerce giant surpassed $2 billion in the first hour, with more than $1 million in Alipay transactions in the first 18 minutes. Singles’ Day generated $5.75 billion in 2012, when sales surpassed the combined online sales of Black Friday and Cyber Monday in the U.S.

Alibaba invented the “11.11 Shopping Festival” in 2009, playing off a celebration of bachelors by students at Nanjing University in the 1990s. Alibaba heavily promotes the holiday with steep retail discounts on its Taobao and Tmall eCommerce sites.

Alibaba has had its share of controversy this year as it was first hit with accusations Alibaba was letting fake and substandard goods be sold through its online marketplaces. Then the Securities and Exchange Commission wanted to know why Alibaba didn’t reveal that investigation before its record-setting, $25 billion IPO last September. More recently, the class-action shareholder lawsuits have arrived.