According to Nanfang Daily, recently,The State Administration for Market Regulation has formally launched an investigation into Ctrip Group Co., Ltd. for suspected abuse of its market dominance in accordance with the Anti-Monopoly Law.About an hour after the news was announced, Ctrip responded that it would actively cooperate with the investigation and fully implement regulatory requirements, and stated that the company's various businesses are currently operating normally.
Affected by the news of the investigation, Ctrip's stock price fell. As of press time, its US stocks (NASDAQ: TCOM) fell more than 16%.
Liu Xu, a special researcher at the National Institute of Strategic Studies at Tsinghua University, analyzed that the "abuse of market dominance" referred to by regulatory authorities may involve the following typical behaviors: First, attaching unreasonable conditions to operators within the platform, such as requiring hotels and B&Bs to maintain "the lowest prices in the entire network."
The second is to restrict or disguised restrictions on exclusive cooperation with merchants through "choose one from two" methods;
The third is to implement differential treatment for transaction counterparts, such as “big data killing” of consumers.
In addition, although the media has previously reported that Ctrip has problems with tying services in ticket sales, it is still unclear whether such behavior still constitutes unreasonable tying as referred to in the investigation.
Legal experts pointed out that if the monopoly behavior is finally determined to be established, Ctrip may face heavy fines. With reference to its sales of approximately 65 billion yuan in the previous year, and based on the 1%-10% penalty ratio stipulated in the Anti-Monopoly Law,Based on conservative estimates of quarterly revenue, the amount of the fine may be between 650 million yuan and 6.5 billion yuan, which may become one of the largest fines in domestic antitrust enforcement.
