China Opens Antitrust Probe Into Trip.Com

(Yicai) Jan. 16 -- China has launched an investigation into leading online travel agency company Trip.Com Group over alleged abuse of market dominance, with similar probes previously opened into e-commerce giant Alibaba Group Holding and on-demand services provider Meituan.

Based on preliminary findings, Trip.Com is being investigated due to suspected abuse of its dominant market position and monopolistic practices, the State Administration for Market Regulation announced on Jan. 14.

In response, Trip.Com said that it has been notified and would actively cooperate with the authorities in the investigation, while continuing normal operations.

Trip.Com was summoned multiple times by regulators in the second half of last year. In August, the Administration for Market Regulation of Guizhou province held talks with the Shanghai-based firm and four other platforms due to potential issues related to the so-called "choose one from two" practice, which can interfere with merchant pricing, as well as price fraud.

Zhengzhou's Administration for Market Regulation also conducted an administrative interview with Trip.Com regarding its "Price Adjustment Assistant" feature in September, issuing a corrective action notice and determining that the platform was using technical means to impose unreasonable restrictions on the transaction pricing of operators within the platform.

Multiple hotel operators have reported that Trip.Com's "Price Adjustment Assistant" automatically scans competitors' platform prices through the backend and forcibly lowers room rates, and even if they disable the feature, it quietly reactivates.

In addition, the Yunnan Provincial Tourism Homestay Industry Association opened an antitrust probe into unfair competition by online travel agents last month, accusing Trip.Com of implementing choose one from two monopolistic clauses.

The association received numerous complaints indicating that Trip.Com is using its market dominance to unilaterally raise commission rates, set unfair trading conditions, and block traffic, which severely harms the rights and interests of operators, it said.

The latest is the SAMR's first major abuse of market dominance investigation since handing Alibaba a CNY18.2 billion (USD2.6 billion) fine for implementing the choose one from two practice in April 2021 and fining Meituan CNY3.4 billion (USD488.1 million), or 3 percent of its sales in China for 2020, in October that same year, with the latter also made to return an exclusive cooperation deposit of CNY1.3 billion.

According to China's Anti-Monopoly Law, operators who abuse their market dominance shall be ordered to cease the illegal conduct, have their illicit gains confiscated, and be fined an amount ranging from 1 percent to 10 percent of their sales from the previous year.

Trip.Com is a leading global travel platform, with its platforms including Ctrip, Qunar, and Skyscanner. It went public in New York [NASDAQ: TCOM] in 2003 and in Hong Kong [HKG: 9961] in 2021, ending down 2.4 percent at USD61.30 a share on the former bourse yesterday, while rising 0.7 percent to close at HKD463.40 (USD59.41) on the latter today.

Trip.Com likely achieved a gross merchandise volume of 56 percent in the hotel and travel market in 2024, significantly surpassing Tongcheng Travel and Meituan, which each had a 13 percent share, according to BOCOM International Holdings. Its business covers 1.2 million hotels in more than 200 countries, as well as 750,000 spots in over 600 Chinese cities.

Trip.Com's net profit almost doubled to CNY19.9 billion in the third quarter of last year from a year earlier, boosted by investment income, while its revenue rose 16 percent to CNY18.3 billion. Its adjusted earnings before interest, taxes, depreciation, and amortization were CNY6.3 billion, with an adjusted EBITDA margin of 35 percent.

Editor: Martin Kadiev