A major Chinese home appliance manufacturer sued Alibaba Group Holding Ltd., alleging the e-commerce giant used its dominant market position to demand exclusivity, the first lawsuit of its type challenging a common practice in China’s highly competitive e-commerce sector.
Guangdong Galanz Group Co. Ltd., a leading microwave manufacturer, said Tuesday that it filed the lawsuit Oct. 28 and that the Guangzhou Intellectual Property Court accepted the case Monday. Galanz said Tuesday that the dispute with Alibaba hasn’t been resolved and it will wait for court notice in accordance with judicial procedures.
Galanz claimed in the suit that the brand’s store on Alibaba’s Tmall platform could not be found on the platform’s search function, severely affecting sales during the annual mid-June home appliance sales event.
A Galanz executive told Caixin that a Tmall manager in charge of platform merchants’ business demanded that Galanz choose between Alibaba and up-and-coming rival Pinduoduo Inc.
The State Administration for Market Regulation hosted a seminar Tuesday with more than 20 online marketplace platforms in Hangzhou, discussing issues in online marketing. The regulator pointed out that “forced exclusivity,” in which merchants are required to choose only one e-commerce platform to work with, is a prominent issue that not only undermines fair competition but also harms the rights and interests of consumers.
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