Vipshop gets highest fine for unfair competition: SAMR

China’s market regulator on Monday imposed 3 million yuan ($ 464,662) in fines, the maximum possible under the country’s unfair competition legislation, on online discount retailer Vipshop, the latest step in a sweeping regulatory tightening intended to put the platform economy on track for healthier growth.

The State Administration for Market Regulation ( SAMR) revealed that between August and December 2020, Vipshop developed and used an inspection system to gain a competitive edge and transaction opportunities, which limited the sales channels of brand operators, hampering the normal operation of network products and services that were provided by brand operators and other operators.

The move came a day after the Anti- Monopoly Committee of the State Council, the cabinet, unveiled new anti- monopoly guidelines tailored for the platform economy, as the country moves to align with global practices to toughen antimonopoly regulation on giant internet platforms.

The Vipshop penalty apparently points to an emerging trend in which platform companies will more frequently fall under the purview of the country’s rules and laws against unfair competition and monopolistic practices, Fang Xingdong, the founder of Beijing- based technology think tank ChinaLabs, told the Global Times on Monday.

Chinese e- commerce giant Alibaba, also in hot water over an anti- monopoly probe by the SAMR, revealed earlier in February that the probe is ongoing and a special task force has been created to conduct internal reviews.

While the country has increased scrutiny and regulation of the platform economy, its legal framework is not on par with its international counterparts, especially when it comes to penalties for breaches of laws and rules, Fang commented, urging revisions to the current legislation to enable sufficient deterrence.