Alibaba’s Tmall slapped with another lawsuit over abuse of market power on the eve of “Double 11”

Written by Wency Chen Published on 

Chinese regulators recently underlined their opposition to monopolistic practices and unfair competition.

Chinese home electronics manufacturer Galanz is suing Alibaba’s online marketplace Tmall for the latter’s alleged abuse of market dominant position. Galanz joins, Vipshop, and Pinduoduo to legally challenge the e-commerce titan’s denounced practices of forcing merchants to enter exclusive partnerships with Alibaba.

The lawsuit follows a dispute between Galanz and Tmall. In June, Galanz alleged via its Sina Weibo account that searches for its products on Tmall, where it runs a flagship store, were leading to “abnormal results” from time to time, seriously affecting sales, KrASIA reported.

The firm, known as a supplier of microwave ovens and other household items, said that this problem began right after some of its executives had visited Pinduoduo, Alibaba’s strong rival, and signed a strategic cooperation agreement on May 28. Yet, Alibaba maintains that search results for Galanz were normal when contacted by KrASIA at the time.

The case, which has been accepted by Guangzhou Intellectual Property Court on November 4, put a spotlight on this prolonged issue in the e-commerce competitive space. Some major operators have been reportedly forcing vendors to choose only one platform to work with, in a bid to compete for more sales and market share.

On November 5, ahead of the annual shopping extravaganza on November 11, known as “Double 11,”  the State Administration for Market Regulation held a meeting in the eastern technology hub of Hangzhou, state media The Paper reported, with the participation of China’s main online retailers, including Alibaba,, Meituan Dianping, Pinduoduo and Vipshop.

During the meeting, officials underlined that “choosing one out of two,” or “exclusive trading” is a behavior violating China’s E-commerce Law, as well as the Antitrust Law and Anti Unfair Competition Law. Besides, the authority announced that it will start antitrust investigations in the sector soon, without disclosing a specific timetable.

Previously, sued Tmall for RMB 1 billion, arguing the latter has been prohibiting some of its merchants to participate in competitors’ sales activities since 2015.

Recently, the JD-Tmall lawsuit was brought to the Beijing Municipal High People’s Court. Vipshop and Pinduduo have both filed applications for joining the case as a third party member. Alibaba’s archrival Tencent is a backer of, Vipshop, and Pinduoduo.

In response to the alleged unfair practice, Wang Shuai, Alibaba’s chief marketing executive, announced via his Weibo on October 14 that “choosing one of two is a normal market practice, just like bad money drives out good.”


You might like these

  • Insights

    Decoding Shein: The rise of China’s newest retail decacorn (Part 1 of 3)



    26 Jan 2021    03:52 AM

KrASIA InsightsKrASIA Insights

  • Picus will invest up to USD 75 million in Asia’s early-stage tech startups.


    German investment firm Picus Capital to focus on Asia in 2021: Q&A with Oliver Heinrich

    By Avanish Tiwary

    25 Jan 202101:05 AM

Most PopularMost Popular

See All