(Yicai) Jan. 16 -- China has launched an antitrust investigation into leading online travel agency Trip.Com Group, following similar earlier probes into e-commerce giant Alibaba Group Holding and on-demand services provider Meituan.

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

The Shanghai-based company said it will actively cooperate with the authorities, adding that its businesses, which include the Ctrip, Qunar, and Skyscanner platforms, are operating normally. The group’s network spans more than 1.2 million international hotels and some 750,000 properties in more than 600 Chinese cities.

Trip.Com’s stock tumbled in the immediate wake of the announcement. In Hong Kong today, its shares [HKG: 9961] regained some lost ground, rising 1.4 percent to end at HKD466.20 (USD59.77) each, after its New York-traded stock [NASDAQ: TCOM] fell 2.4 percent to USD61.30 yesterday.

In the second half of last year, Trip.Com was summoned multiple times by local market regulators. In August, Guizhou province’s watchdog held talks with the firm and four other platforms due to potential issues related to de-facto exclusivity clauses -- the so-called “choose one from two" practice -- which can interfere with merchant pricing, as well as price fraud.

In September, Zhengzhou’s regulator ordered Trip.Com to correct tools related to its “Price Adjustment Assistant,” finding the feature had used technical means to unreasonably restrict merchants’ pricing.

Several hotel operators have reported that the “Price Adjustment Assistant” automatically scans rival platforms and forces lower room rates. Even when hoteliers successfully request the feature be disabled, it can quietly reactivate, they have said.

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

The association said it had received numerous complaints alleging Trip.Com used its market dominance to raise commissions unilaterally, impose unfair trading conditions, block traffic, and seriously harm operators’ rights and interests.

This is the first time since the Alibaba and Meituan “choose one from two” cases that the State Administration for Market Regulation has opened a formal antitrust investigation into a major platform operator.

Under China’s Anti-Monopoly Law, companies found to have abused a dominant market position may be ordered to cease the unlawful conduct, have their illegal gains confiscated, and face fines of between 1 percent and 10 percent of their sales revenue from the previous year.

Following their probes, Alibaba was fined CNY18.2 billion (USD2.6 billion) in April 2021 and Meituan CNY3.4 billion (USD488.1 million), or 3 percent of its sales in China for 2020, in October 2021, with the latter also made to return an exclusive cooperation deposit of CNY1.3 billion.

Trip.Com likely had a 56 percent share of the hotel and travel market’s gross merchandise volume in 2024, well ahead of rivals Tongcheng Travel and Meituan on 13 percent each, according to Bocom International Holdings.

Net profit at Trip.Com almost doubled to CNY19.9 billion in the third quarter of last year from a year earlier, boosted by investment income, while revenue jumped 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