JD.com, Meituan and ByteDance led the first group of Chinese Big Tech companies to pledge compliance with the law, a day after regulators told them to “learn a lesson” from Alibaba Group Holding in Beijing’s latest antitrust crackdown.

 

On April 14, 12 of the 34 tech companies lectured by authorities on Tuesday had issued public statements disclosing their commitment to do business in compliance with laws, after being told to take note of Alibaba’s recent antitrust punishment and to conduct self-inspections in the coming month.

 

Alibaba, the owner of the South China Morning Post, was fined a record US$2.8bil for its monopoly conduct of forcing merchants to pick its platforms as their sole online venue for sales and promotions, a practice known as “picking one from two”.

 

The remainder of the companies are expected to publish their public commitments in the coming two days.

 

In all cases, the public statements strictly toed the line from Tuesday’s meeting which was co-hosted by China’s antitrust watchdog the State Administration for Market Regulation (SAMR), the country’s cyberspace administration, and its taxation authority.

 

JD.com, for instance, made eight promises that included “never implementing measures to force merchants to pick one from two [and] never abusing dominant market position or implementing any monopoly deals”. The e-commerce giant also said it would “never publish illegal advertisements [and] never sell products with substandard quality”.

 

Meituan promised it would not impose unreasonable measures that force merchants to “pick one from two” and that it would not abuse its market position to restrict competition. In addition, the company offered its full support to China’s regulators. “Once we find evidence of illegal behaviour, we will report it to regulators in a timely manner and fully cooperate with any investigation,” Meituan said.

 

ByteDance, the owner of short video app TikTok and Douyin, made 13 promises in its public statement. China’s most valuable unicorn said it would “not illegally collect and misuse user data” and follow “the minimum principal” in collecting data from users. E-commerce platform Pinduoduo said it would “shoulder more social responsibilities in a proactive manner”, as well as comply with legal and regulatory requirements.

 

Shares of Chinese stocks surged in Hong Kong on Wednesday morning. Meituan gained 5%, rebounding from a 7% fall on Tuesday.

 

Beijing’s targeting of the country’s key internet platforms, which included Kuaishou, Bilibiliand Didi Chuxing - and the compliance from Big Tech which has a combined market capitalisation of at least US$2.7 trillion - comes at a time when the Chinese government is trying to use antitrust laws and other regulatory approaches to contain “disorderly” expansion of the Chinese economy and society.

 

China’s regulators have lectured Big Tech on misconduct such as forcing merchants to pick one platform, abusing dominant market positions, making hostile bids to acquire top players in specific market segments, misusing big data to charge unfair pricing to certain clients, turning a blind eye to inferior quality products, leaking customer data, as well as evading tax payments.

 

“Regulatory lines can’t be crossed and red lines of the law can’t be touched,” SAMR’s said on Tuesday.

 

The 34 Internet service providers targeted in the move, many of which are listed in the US and Hong Kong, were told to “enhance their sense of responsibility and give priority to national interests”.

 

“You must strictly avoid disorderly expansion of capital to ensure China’s economic and social security, and you must strictly avoid disorderly monopolies to ensure fair market competition,” according to the statement, referring to Beijing’s guidelines for the companies.

 

The companies were given one month to carry out a “self-check and self-correction”, after which the government would conduct follow-ups and “severely” punish those that failed to address misconduct, the SAMR said. 

 

 - SCMP