CCTV News:Some sell goods below the purchase cost through huge subsidies, "dumping at low prices"; Some mark false original prices and discounts when selling goods, and lie about price reduction to trick consumers into buying. To this end, the General Administration of Market Supervision imposed administrative penalties on unfair price behaviors of five community group-buying enterprises, including Orange Heart Optimization, Buy More Vegetables, Meituan Optimization, Shihui Group and Food Enjoyment Club, and five enterprises were fined, with a total fine of 6.5 million yuan. In this regard, on the morning of March 3, the General Administration of Market Supervision made an administrative penalty on the unfair price behavior of five community group buying enterprises.

　　Question 1: Recently, the General Administration of Market Supervision imposed administrative penalties on five community group buying enterprises according to law. What are the main considerations?

　　In recent years, the status of Internet economy in China’s national economy and society has been significantly improved, and it has become an important engine to promote economic development and an important starting point to improve people’s livelihood. It has played a positive role in coping with the impact of epidemic situation, improving shopping experience and improving supply chain structure. However, with the large-scale entry of major Internet platform enterprises into the community group buying market, problems such as irregular order and illegal operation have become increasingly apparent, which has aroused great concern from all walks of life.

　　First, improper means are used to squeeze the offline community economic market, which is easy to cause disorder and affect social stability. Internet platform enterprises use the advantages of capital and traffic to enter "community group buying" and compete for the market at a price lower than the cost, which will have an impact on offline community economic models such as small vendors and community convenience stores and bring obvious negative effects. Second, large Internet platform enterprises have an unfair competition tendency of "burning money to grab the market and raising prices after monopoly", which is easy to damage consumers’ rights and interests. In the short term, consumers can really get short-term benefits at a lower price when the relevant enterprises implement the "subsidy" strategy in the early stage of competition. However, after occupying the market, related enterprises are likely to raise prices substantially to obtain high monopoly profits, seriously damaging the interests of consumers. Third, unfair price behavior disrupts the market price order. Community group buying platforms generally have problems such as huge subsidies, selling goods below the cost price, and some community group buying platforms use price fraud to deceive consumers. The above acts seriously infringe upon the legitimate interests of other operators and consumers, damage the market environment of fair competition and undermine the normal market price order.

　　The products and services provided by community group buying are mainly "rice bags" and "vegetable baskets". The rising prices of these basic livelihood commodities are likely to lead to economic and social turmoil. The Central Economic Work Conference made it clear that the disorderly expansion of capital should be prevented. The General Administration of Market Supervision resolutely implemented the deployment of the Central Economic Work Conference, took effective measures to strengthen the supervision of the community group buying market, responded to social concerns in a timely manner, and standardized corporate behavior. Monitor the price behavior of community group buying enterprises and conduct investigations according to law. It has been found that there are unfair price behaviors such as low-price dumping and price fraud in community group buying enterprises such as Orange Heart Youxuan (Beijing) Technology Development Co., Ltd., Shanghai Yucan Information Technology Co., Ltd., Shenzhen Meituan Youxuan Technology Co., Ltd., Beijing Shihui Technology Co., Ltd. and Wuhan Qiwei Delicious Technology Co., Ltd.

　　Question 2: Please brief us on the basic situation of these five cases?

　　The companies punished this time are: Orange Heart Optimization (Beijing) Technology Development Co., Ltd. (Orange Heart Optimization), Shanghai Yucan Information Technology Co., Ltd. (Buy more food), Shenzhen Meituan Optimization Technology Co., Ltd. (Meituan Optimization), Beijing Shihui Technology Co., Ltd. (Shihui Group) and Wuhan Seven Kinds of Delicious Technology Co., Ltd. (Food Enjoyment). The above five enterprises occupy a large share in the community group buying market, and the basic situation of the case is as follows.

　　First, through huge subsidies, there is a "low-price dumping" behavior of selling goods below the purchase cost. In order to seize the market, four community group buying enterprises, such as Orange Heart Youxuan (Beijing) Technology Development Co., Ltd., Shanghai Yucan Information Technology Co., Ltd., Shenzhen Meituan Youxuan Technology Co., Ltd. and Beijing Shihui Technology Co., Ltd., took advantage of the capital and adopted subsidies in the form of direct drop and coupons, resulting in the sales price of a large number of goods being lower than the purchase cost. If the costs of operation, warehousing and logistics are included, the actual sales revenue is much lower than the cost of goods, which disrupts the normal production and operation order and damages the legitimate rights and interests of other operators. The above acts violate the relevant provisions of Article 14 of the Price Law of People’s Republic of China (PRC), and constitute dumping at a low price.

　　The second is to use price fraud to trick consumers into trading with them. Five companies, including Orange Heart Optimization (Beijing) Technology Development Co., Ltd., Shanghai Yucan Information Technology Co., Ltd., Shenzhen Meituan Optimization Technology Co., Ltd., Beijing Shihui Technology Co., Ltd. and Wuhan Qiwei Delicious Technology Co., Ltd., used false original prices, discounts, and lied about price reduction to trick consumers into buying goods; There are price violations such as not clearly indicating the meaning of the price comparison line. The above-mentioned behaviors belong to the behaviors mentioned in Article 7 of the Provisions on Prohibiting Price Fraud and Article 21 of the Interim Provisions on Regulating Promotion Behavior, which violates the relevant provisions of Article 14 of the Price Law of People’s Republic of China (PRC) and constitutes price fraud.

　　Judging from the investigation, the illegal facts in five cases are very clear. During the investigation, we extracted the commodity pages, relevant financial data and service agreements related to price behavior according to law, carefully combed and analyzed the relevant materials, and repeatedly accounted for the amount of subsidies. At the same time, we also solicited the opinions of relevant parties according to the specific circumstances of the case. The survey shows that the facts of unfair price behaviors of five enterprises are clear and the evidence is conclusive. The General Administration of Market Supervision decided to impose a total fine of 6.5 million yuan on five enterprises, including Orange Heart Optimization (Beijing) Technology Development Co., Ltd., Shanghai Yucan Information Technology Co., Ltd., Shenzhen Meituan Optimization Technology Co., Ltd., Beijing Shihui Technology Co., Ltd. and Wuhan Qiwei Delicious Technology Co., Ltd., for low-price dumping and price fraud.

　　Question 3: We noticed that the above-mentioned enterprises were fined. What factors were mainly considered?

　　When the General Administration of Market Supervision made the decision on administrative punishment, it mainly considered the following aspects. First, illegal activities have a greater impact on the normal market competition order. The above-mentioned enterprises sell goods below cost, with a wide range of subsidies, frequent subsidies and large subsidies, and their business volume has exploded, which has a great impact on the normal business activities of farmers’ markets, bazaars and small traders. Second, the social harmful consequences of illegal acts are more serious. The above-mentioned enterprises have great influence in the industry, with a huge number of users and huge market influence. The impact of their illegal activities is rapidly amplified by the scale effect and network effect of the Internet, with wide coverage and serious harmful consequences. Third, the circumstances of the illegal act are relatively bad. After the administrative guidance meeting of the General Administration of Market Supervision to standardize the order of community group buying, although the amount of subsidies for the above-mentioned enterprises has been reduced, it has not been comprehensively rectified. Therefore, the General Administration of Market Supervision decided to impose a fine within the scope prescribed by law in the hope of investigating a number of cases, standardizing an industry and purifying a field.

　　Question 4: What other work has the General Administration of Market Supervision done to strengthen the supervision of community group buying, and what are the specific considerations for the next step?

　　On December 22, 2020, the General Administration of Market Supervision and the Ministry of Commerce organized an administrative guidance meeting to regulate the order of community group buying. The meeting affirmed the positive significance of the economic development of the Internet platform, and seriously pointed out the outstanding problems such as low-price dumping and price fraud in community group buying. It is emphasized that Internet platform enterprises should strictly regulate the business behavior of community group buying, and strictly abide by the prohibition of low-price dumping and price fraud; Do not engage in acts of unfair competition such as commercial confusion, false propaganda and commercial slander; Do not use the advantages of data to "kill" and harm the legitimate rights and interests of consumers; Do not use technical means to damage the order of competition and hinder the normal operation of other market players.

　　In the middle and late December of 2020, the General Administration of Market Supervision directly investigated five community group buying enterprises. On March 3, 2021, the General Administration of Market Supervision publicly fined the above-mentioned community group-buying enterprises for unfair price behaviors such as low-price dumping and price fraud, which effectively shocked the illegal enterprises and effectively promoted their rectification.

　　In the next step, the General Administration of Market Supervision will actively respond to social concerns, strengthen investigation and study, judge and grasp the market dynamics of community group buying, innovate supervision methods, strengthen law enforcement and case handling, standardize the market order of community group buying according to law, effectively safeguard the legitimate interests of other operators and the legitimate rights and interests of the people, and create a fair and orderly market environment.