The boss of one of China’s largest online marketplace companies has called for a direct rival to be fined by the country’s anti-trust authorities in a move that could have some serious ramifications for both publicly traded companies involved.
After a record fine of some $2.8 billion was imposed by Chinese competition authorities on e-commerce giant Alibaba, 30 of the country’s biggest internet company’s were reportedly summoned to a meeting to explain the case and dissuade others from similar practices. Following the meeting, the Chief Executive of classifieds company 58.com Yao Jinbo called on the authorities to levy a similar fine on 58’s competitor in the real estate marketing space Beike.
According to local English language publication Week in China, Jinbo was quoted as saying:
“In the property brokerage sector someone is pretending that sellers are voluntarily choosing ‘one from two’ [a now frowned upon tactic that forces merchants to choose a single platform as their exclusive distribution channel]. I strongly urge the country to impose an antitrust fine on Beike of Rmb4 billion, using 4% as the benchmark [the same penalty levied on Alibaba’s sales]”
Beike is the portal that was set up in 2018 by leading brokerage firm Lianjia and currently operated by publicly traded KE Holdings. The portal is the market leader in China in terms of inventory and revenue with 58’s property vertical Anjuke widely considered to be in second place. Beike is similar in some ways to Redfin as a site that displays not only listings from its own brokerage firm but those of rivals as well.
Lianjia has been accused of unethical practice in the past with claims that the brokerage firm requires sellers to sign an exclusivity clause while charging hefty commission and making promises to sell above market value. The latest claims being made by 58.com centre around the practice of having brokers choosing to list exclusively with one portal company, a claim that a Beike spokesperson denied in a statement:
“Since its inception, Beike has adhered to lawful management, improved compliance, and used technology to drive the healthy development of the industry.”