China’s JD.com sues Alibaba, claiming false advertising on fast delivery
November 6, 2015 09:08 AM
(Bloomberg)—JD.com Inc has sued Alibaba Group Holding Ltd. in a Beijing court for false advertising and unfair competition, escalating a running spat between China’s largest e-commerce players ahead of their crucial “Singles’ Day” online contest next week.
JD’s lawsuit against its larger rival in Beijing’s Haidian district court was accepted on Thursday, the court said in a statement on its website. JD.com., No. 1 in the Internet Retailer 2015 China 500, accused the company co-founded by billionaire Jack Ma of exaggerating its same-day delivery service, according to the statement on Friday.
The lawsuit opens another front in the battle between the fierce rivals. JD also said this week it had filed a complaint accusing Alibaba of pressuring merchants to shun competing platforms, which the commerce regulator agreed to examine.
JD said Alibaba “misled consumers to win an unfair competitive advantage” and that the company “suffered reputation and economic losses” from the practices, according to the statement.
“It’s wrong for competitors to mislead the market by claiming they can match this when they can’t,” a Beijing-based spokesman for JD said by phone.
An Alibaba spokeswoman said the company couldn’t immediately comment.
JD’s lawsuit centered around ads promising same-day delivery that were displayed on Beijing’s subway system. The company said that Alibaba’s pledges covered merely eight core districts of Beijing while suggesting a citywide capability, according to the court statement.
The lawsuit emerged just before Singles’ Day commences Nov. 11. During China’s biggest online promotion, e-commerce operators flood the Internet with bargains to drive a shopping binge that dwarfs the U.S. Black Friday and Cyber Monday events. Like its American counterpart, the event provides a significant chunk of revenue for e-commerce companies.
Both firms expend major resources and effort to secure merchant partners for the promotion. Alibaba alone has invested $4.6 billion for a stake in a brick-and-mortar domestic retailer, in part to challenge JD’s strength in consumer electronics.
Alibaba, which started Singles’ Day in 2009, began replicating its success overseas last year, seeing sales spikes led by Russia. Last year more than 57.1 billion yuan ($9 billion) of transactions were conducted through its platform during the promotion, more than the combined total of all U.S. merchants on Cyber Monday.