(Yicai) July 27 -- Trip.Com Group's shares jumped despite China's biggest online travel agency getting fined CNY5.2 billion (USD767.9 million) by the country's market watchdog for abusing its dominant domestic position in the online hotel-booking services market.

Trip.Com [HKG: 9961] rose 4.4 percent to HKD357.60 (USD45.60) a share as of 10.50 a.m. in Hong Kong today, after surging by as much as 7.7 percent at one point.

Under Articles 57 and 59 of the Anti-Monopoly Law, and taking into account the nature, severity, and duration of Trip.Com's monopolistic conduct, the Shanghai-based firm was ordered to cease violations and refund CNY122 million (USD18 million) in order deposits forcibly withheld from hotel operators, forfeit CNY1.7 billion of illegal gains, and pay a fine of CNY3.5 billion, equivalent to 7.5 percent of its nearly CNY47 billion (USD6.9 billion) domestic revenue last year, the State Administration for Market Regulation announced on July 25.

Trip.Com has been using its traffic allocation mechanism to carry out two types of monopolistic conduct since 2020, the SAMR noted. First, it required hotels under its "exclusive brand" tier to enter exclusive alliances, using traffic prioritization and other benefits as incentives while barring them from working with rival platforms.

Second, it forced hotels under its "gold" and "unbranded" tiers to offer network-wide lowest prices using tools such as "price adjustment assistant" and "listing manager" as well as manual intervention to automatically lower prices, backed by punitive measures including traffic restrictions, delisting, and the withholding of order deposits, the SAMR pointed out.

The SAMR penalized Alibaba Group Holding and Meituan in 2021 and CNKI in 2022 for antitrust violations, but Trip.Com's fine is the highest penalty ratio imposed in such a case ever.

Trip.Com accepted the decision "sincerely and unreservedly" and would implement the required rectifications item by item, it said on the same day, adding that it has already drawn up 19 measures across five areas, including immediately ending exclusive cooperations, halting unreasonable network-wide lowest price requirements, protecting hotel operators' pricing autonomy, strengthening consumer protection, and improving compliance.

The specific plan will be publicly disclosed later, with Trip.Com accepting public oversight, the company stressed.

Trip.Com used algorithmic monitoring, traffic control, and ecosystem lock-in to carry out more concealed forms of monopolistic conduct, with its "price adjustment assistant" system scanning competitors' prices in real time to create a "price-lock" effect on merchants, Shi Jianzhong, vice president of the China University of Political Science and Law and a member of the State Council Anti-Monopoly Committee's expert advisory group, said in an article for the People's Daily.

The antitrust enforcement addresses two policy priorities: curbing "involutionary" competition and improving the business environment, Shi noted. The move could help push the industry from price wars toward competition on value, Shi added.

Trip.Com's net profit stood at USD4.8 billion last year, while its revenue rose 17 percent to CNY62.4 billion from the previous year, according to its financial report. Its gross profit reached CNY50.3 billion for a gross profit margin of about 80 percent.

Established in 1999, Trip.Com listed in New York in 2003 before completing a secondary listing in Hong Kong in 2021. It operates several brands, including Ctrip, Trip.Com, Qunar, and Skyscanner, with its businesses spanning flight and transportation ticketing, hotel booking, package tours, and corporate travel management, making it one of China's largest online travel platforms.

Editor: Martin Kadiev