China’s market regulator has issued fines against five group-buying platforms over “improper pricing behavior,” accusing them of trying to monopolize the market and mislead customers.

The State Administration for Market Supervision issued 1.5 million yuan (US$232,000) in administrative fines to each of four platforms: Chengxin Youxuan, owned by the ride-hailing giant Didi Chuxing; Pinduoduo’s Duo Duo Maicai; Alibaba-backed Nice Tuan; and Meituan Select. The platform Shixianghui was fined 500,000 yuan.

The regulator said in a notice that the five platforms sold goods at below-cost prices to “squeeze out competitors or monopolize the market.” Such behavior violated Article 14(2) of China’s price law, disrupted the normal order of the market and infringed on the lawful rights of other companies, it added.

In China, group-buying platforms allow residents in a community to band together and buy items in bulk at large discounts. However, some platforms have been using deceptive pricing strategies to entice consumers, the regulator said.

Meituan Select, Duo Duo Maicai and Chengxin Youxuan issued separate statements saying that they attached great importance to the notice and would sincerely accept the penalties. The companies promised to overhaul their policies to comply with relevant laws and to protect the rights of consumers.

The state administration said there had been increased signs of “disorderly and illegal practices” after leading Chinese tech firms set up their own group-buying platforms. Some companies wanted to dominate the market with low prices and then raise prices after they achieved a monopoly.

Such strategies of selling products below cost have impacted small vendors and community businesses, the regulator added.

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