A dozen Chinese leading internet companies including Baidu, ByteDance and JD.com issued commitments on Wednesday to obey antitrust laws, a day after regulators ordered them to conduct self-inspections and rectify illegal practices within one month.
Food delivery platform Meituan, retail giant Suning.com, Twitter-like social media site Sina Weibo and e-commerce company Vipshop were also among the 12 firms to signed anti-monopoly pledges, according to a statement posted on the State Administration for Market Regulation’s website.
The market watchdog, along with the Cyberspace Administration and the State Taxation Administration, met with executives from 34 major Chinese internet companies on Tuesday, commanding them to fix anti-competitive behavior and heed the warning from the Alibaba example. The regulatory authority said that other firms will also release statements over the next three days, calling for supervision from the public.
The move comes after Chinese regulators issued a $2.8 billion fine on Saturday against e-commerce giant Alibaba for abusing its dominant power in the online shopping market. Two days later, financial authorities demanded that Ant Group, Alibaba’s fintech subsidiary, cut ties with its ubiquitous payment app Alipay, which is to become a financial holding company under supervision of the Chinese central bank, adopting a similar model to the operations of traditional banks.
These tech companies are required to avoid forcing merchants to use their services exclusively, stop abusing their dominant market positions, and cease carrying out acquisitions that could squeeze out their smaller rivals. Community group buying sites like Pinduoduo and Dingdong Maicai will be banned from selling goods at below cost to grab a bigger market share in mainland China, currently the hottest e-commerce arena in the world. Other issues these firms are expected to address include counterfeiting, data leakage and tax evasion.
The regulator also warned that companies which continue to break the rules will face heavy punishments.
Meituan’s stock price surged 3.62% and JD.com saw its shares rise 2.55% in Hong Kong on Wednesday. Baidu gained 3.21%, while Alibaba rallied 1.97%.