Why Trip.com has been fined $770M in China
What's the story
China's market regulator has slapped a massive penalty of CNY 5.2 billion ($770 million) on Trip.com Group for abusing its dominant position in the country's online hotel-booking market. The State Administration for Market Regulation (SAMR) said that Trip.com had used traffic-allocation mechanisms, platform rules, and technical measures to strike exclusive deals with some hotels in its quest to offer the lowest prices.
Compliance
Trip.com to refund booking deposits worth CNY 122M
The SAMR has confiscated CNY 1.66 billion in illegal gains from Trip.com and imposed a fine of CNY 3.52 billion on the company.
Along with this, the regulator has also ordered Trip.com to refund booking deposits worth CNY 122 million that it had withheld from hotel operators.
In response to the penalty, Trip.com said they "sincerely accept" the decision and will make necessary changes in compliance with the regulator's requirements.
Impact
Trip.com's practices harmed competition and consumers
The SAMR said that Trip.com's practices had harmed competition and consumers by restricting hotels' ability to operate across platforms and set their own prices.
The regulator's statement emphasized the negative impact of these actions on both the competitive landscape of the industry and consumer choices.
This penalty comes as part of China's broader effort to curb unfair competition among internet platforms and excessive price competition that authorities say has hurt businesses and fueled deflationary pressures.