Chinese Court Rules "Alibaba to Pay 180 Billion KRW in Damages to Jingdong"

Alibaba founder Jack Ma [Photo by Yonhap News]

Chinese e-commerce company Alibaba has been ordered to pay 180 billion KRW in damages to its competitor JD.com for forcing platform merchants to make an "either-or" choice.

According to local Chinese media on the 30th, the Beijing Higher People's Court ruled the day before that Alibaba's coercion of merchants to choose exclusively between platforms constitutes an abuse of market dominance and monopolistic behavior, ordering Alibaba to compensate JD.com with 1 billion yuan (approximately 182 billion KRW). Previously, Alibaba had been fined over 3 trillion KRW for the same reason, and now it must also pay damages to its competitor. The court also demanded that Alibaba issue a "public apology" to JD.com.

JD.com, Alibaba's competitor, welcomed the court ruling, stating, "Fair competition is the core of a market economy," and added, "Monopolistic behavior damages the legitimate rights and interests of merchants and consumers and hinders market development and vitality." On the other hand, Alibaba issued a brief statement saying it "respects the court's ruling."

Earlier, JD.com reported Alibaba to authorities, claiming that ahead of China's largest shopping festival, the "Guanggun Festival," in 2015, merchants on its platform withdrew under pressure from Alibaba. This was because Alibaba forced merchants to choose only one platform between Alibaba and other e-commerce platforms.

In 2017, JD.com filed a lawsuit against Alibaba, alleging that Alibaba and its subsidiary Tmall forced merchants not to sell products on JD.com's platform.

In April 2021, the State Administration for Market Regulation of China imposed a fine of 18.228 billion yuan (approximately 3.3 trillion KRW) on Alibaba for forcing merchants to make an exclusive choice.

Some interpret that after Alibaba founder Ma Yun harshly criticized financial authorities for "excessively conservative regulatory policies," the authorities, feeling offended, took disciplinary action. Subsequently, Ma Yun disappeared from public view and spent about two years abroad until his return in March. Alibaba, once the absolute leader in China's e-commerce industry, has recently lost its top sales position to JD.com, signaling a weakening of its market position.