China’s second largest online retailer, JD.com, has lodged a formal complaint with Chinese regulators, alleging its larger rival Alibaba is attempting to restrict competition.

China’s competition regulator, the State Administration for Industry and Commerce (SAIC), imposed a new regulation on October 1 preventing e-commerce platforms from restricting their sellers from participating in promotions on rival platforms.

According to a letter from JD.com, it has evidence of Alibaba “forcing” merchants to deal exclusively with one e-commerce site during promotional activities.

JD.com claims merchants have been told if they participate in Alibaba’s 11.11 promotion, they must not participate in promotions on rival platforms – eg: JD.com. If they do, they face “punishment or sanctions”.

But an Alibaba spokesman, Rico Ngai, told Reuters the company “strongly denies the accusations”.

“Alibaba welcomes competition as it benefits consumers, merchants and service providers,” he said.

But JD.com claims Alibaba’s behaviour has “harmed merchants’ interests” and “not only obstructed normal market competition, but also seriously harmed consumers’ interests”.

This story first appeared on Inside Retail’s sister site, Inside Retail Asia. 

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