On January 14, the State Administration for Market Regulation issued a notice stating that Vipshop had been investigated in accordance with the law for suspected conduct of unfair competition. According to the report, the subjects under investigation were Vipshop (China) Co., Ltd. and Guangzhou Vipshop E-commerce Co., Ltd.
It is understood that in December 2020, Vipshop once constituted Article 14 (4) of the "Price Law" "using false or misleading price methods to trick consumers or other business operators into dealing with them "Improper price behavior was fined 500,000 yuan by the General Administration of Market Supervision.
Previously, three companies had been punished for violating relevant regulations of the Anti-Monopoly Law. The companies that were punished were Ali Investment, China Reading Group, and Fengchao Network. Regarding the punishment, the three companies all stated that they had actively rectified and corrected in accordance with regulatory requirements.
While imposing penalties on the three companies involved, the relevant person in charge of the State Administration for Market Regulation also stated that they are reviewing cases involving concentrated declaration of business operators involving the agreement control structure, such as Douyu Live Broadcast and Huya Live Broadcast merger.
On December 24, 2020, the State Administration for Market Supervision once notified that, according to the report, the Alibaba Group Holding Co., Ltd. (ie, "Alibaba") was filed for investigation of suspected monopolistic conduct such as "choose one out of two" in accordance with the law. Today, Vipshop is being investigated for suspected conduct of unfair competition.
Comment: Before the rules, big and small are equal
It is understood that Vipshop (China) Co., Ltd. is an investment institution that operates its business mainly through its subsidiaries. According to the company's information, the company has invested and established 43 subsidiaries, most of which are Vipshop's branches in various regions, and are also shareholders of Lefeng.com, Vipshop Financial, and Pinzhong Commercial Factoring.
Guangzhou Vipshop E-Commerce Co., Ltd. was registered in Guangzhou by Shen Ya and Hong Xiaobo in 2017. It is the main operating entity of the current e-commerce platform "Vipshop". Whether it is Guangzhou Vipshop E-commerce Co., Ltd. or Guangzhou Vipshop E-commerce Co., Ltd., both are domestic variable interest entities of Vipshop (NYSE: VIPS).
According to data, Vipshop was listed on the New York Stock Exchange on March 23, 2012, with an issue price of US$6.5, and a total of US$71.529 million was raised. As of the close of US stocks on January 13, 2021, its stock price closed at $28.59, with a total market value of $677 million.
In terms of performance, Vipshop’s recently announced third-quarter 2020 financial report shows that its total net revenue during the reporting period was 23.2 billion yuan, an increase of 18.2% compared with 19.6 billion yuan in the same period in 2019; net profit was 1.2 billion yuan , An increase of 42.1% compared with 875.5 million yuan in the same period in 2019.
Beduo Finance learned that according to media reports, many people familiar with the matter said that Vipshop is currently seeking a secondary listing in Hong Kong, with a financing target of up to 2.5 billion US dollars. Prior to this, Chinese concept stocks such as Alibaba, Netease, JD.com, Huazhu Group and New Oriental have all achieved their second listing in Hong Kong.
Regarding the case of "Vipshop being investigated for suspected unfair competition", Vipshop responded that it will actively cooperate with the supervisory authority to investigate. Beduo Finance found that on January 14, Xinhuanet, The Paper, etc. also reprinted comments saying that “sizes are equal before the rules.”
The comment believes that from the Internet giants with complex business categories to the relatively small vertical e-commerce, the recent actions of the national regulatory authorities have sent a clear signal: whether it is large or small, the market supervision rules are treated equally.
Previously, the main person in charge of the State Administration of Market Supervision and Administration also stated in an interview with central media that “continuously increase the enforcement of anti-monopoly and anti-unfair competition, and clearly released that no matter online or offline can become anti-monopoly and anti-unfair competition. A strong signal from a place outside the law."
Have been reported as having "choose one" behavior
It’s worth mentioning that as early as September 3, 2020, the social e-commerce platform Mengfu Group (formerly known as "Love Stock") issued the "Statement on Boycotting Vipshop’s Unfair Competition Acts," saying that Vipshop There are acts of unfair competition that force businesses to "choose one of two".
In the statement, the Mengfa Group stated, “There are continuous feedbacks from merchants to Ai Stock (that is, the Mengxi Group) that Vipshop has explicitly requested that merchants not cooperate with Ai Inventory, forcing merchants to remove all products and activities on Ai Inventory... It even directly offline all the merchandise sold by the merchants at Vipshop."
On September 14 of the same year, Mengfu Group stated that it had submitted a real-name report to four institutions including the State Administration of Market Supervision and Administration by post on September 11. According to the report, the number of affected businesses on its platform has increased from more than 100 in early August to more than 400.
Regarding the content of the Menfa Group's report, Vipshop only stated that the situation was not true. In addition, Vipshop did not provide details. According to a report from China News Service on September 14, 2020, a Vipshop staff member believes that love inventory is a "ceramic hype" and does not want to take up public resources to respond.
According to "Finance and Economics Weekly", an e-commerce industry analyst who did not want to be named believes that although the two platforms have different models, there is a large overlap in categories, and the key reason is the snatching of clothing and other sources. “Vipshop’s commissions are relatively high. The prices of the same brand category on different platforms vary greatly, which naturally causes competition.”
In response to an interview with a reporter from China Finance and Economics Weekly, the person in charge of Ai Inventory also said that he looks forward to the upcoming regulatory policies and hopes to see a healthier and orderly development of the Internet industry, small and medium-sized platforms are protected, and businesses are no longer forced to "second choice" One".
320 million yuan fined in 2019
The State Administration for Market Regulation mentioned in the “Measures for the Supervision and Administration of Online Transactions (Draft for Comment)” on October 20 that operators of online trading platforms must not abuse their dominant position to interfere with the independent operations of operators on the platform, and must not interfere with operators on the platform. Commercial cooperation on other platforms is unreasonably restricted or imposes unreasonable conditions.
On November 10 of the same year, the State Administration for Market Regulation also publicly solicited opinions on the "Guidelines for Anti-monopoly in the Field of Platform Economy (Draft for Comment)." It is understood that the draft for comments clearly intends to define "choice of two" or other behaviors with the same effect as an abuse of a dominant market position and constitute a restricted transaction.
In terms of enforcement, the State Administration of Market Supervision issued in mid-December the “Investment in Alibaba’s acquisition of Yintai Commercial Equity, China Reading Group’s acquisition of Xinli Media’s equity, Fengchao Network’s acquisition of China Post Express’ equity in three cases of failure to declare illegal implementation of operator concentration. "Decision on Administrative Penalty", fined 500,000 yuan for each of the above three companies.
According to Article 48 of the Anti-Monopoly Law, “Where operators implement concentration in violation of the provisions of this Law, the Anti-Monopoly Law Enforcement Agency of the State Council shall order the suspension of the concentration, dispose of equity or assets within a time limit, transfer business within a time limit, and take other necessary measures to restore concentration. In the previous state, a fine of less than 500,000 yuan can be imposed."
In other words, the fines received by Alibaba Investment Co., Ltd., China Reading Group, and Shenzhen Fengchao Network Technology Co., Ltd. are based on the penalty limit imposed by Article 48 of the current Anti-Monopoly Law. It is understood that this is also the only case that has been punished for violation of the Anti-Monopoly Law.
While penalizing the aforementioned three companies, the head of the Anti-Monopoly Bureau of the State Administration for Market Regulation revealed that Guangzhou Huya Technology Co., Ltd. (ie "Huya Live Broadcast") and Wuhan Douyu Yule Network Technology Co., Ltd. (ie " "Betta Live") merger and other cases involving centralized declaration of business operators involving agreement control structures.
According to the “Annual Report on China’s Anti-Monopoly Law Enforcement (2019)” issued by the State Administration for Market Regulation on December 25, 2020, the market supervision and administration department opened and investigated 103 monopoly cases in 2019, closed 46 cases, and fined 320 million yuan.
Looking at the world, anti-monopoly is also the general trend and popular desire internationally. On December 15, 2020, the European Union also promulgated the "Digital Services Law" and the "Digital Market Law", aimed at curbing unfair competition on large online platforms.
Public information shows that in the past four years, Google, Apple, Facebook, Amazon and other technology giants have been subject to antitrust investigations around the world. Among them, the EU imposed antitrust penalties on Google for three consecutive years from 2017 to 2019, and the cumulative amount exceeded 9 billion US dollars.
Now, Alibaba and Vipshop are being investigated one after another, which means that anti-monopoly and anti-unfair competition are irrelevant. The judgments and rulings of law enforcement agencies have always had a profound impact on the choice of industries, and will play a great role in demonstrating similar enterprises.