Chinese regulators fine Alibaba-backed browser for false advertising

UC Browser mobile app. Image by sharafmaksumov | Bigstockphoto

BEIJING (Reuters) -Local market regulators in China on Tuesday fined subsidiaries of Alibaba Group Holding Ltd and 360 Security Technology Inc for engaging in false advertising.

The punishments follow negative media exposure on the divisions and increasing pressure on tech companies from China’s State Administration for Market Regulation (SAMR).

The local market regulator in the southern city of Guangzhou fined UC Browser, a subsidiary of Alibaba, 2,091,636 yuan ($319,470) for false advertising, according to a statement on its website.

Additionally, the market regulator in Beijing fined a subsidiary of 360 Search, a popular search engine, 2 million yuan ($306,000) for false advertising, state-owned newspaper Beijing Youth Daily reported.

Both companies were criticized on the country’s annual high-profile Consumer Rights Day television show last month for failing to verify the claims in advertisements for medical services by not procuring the necessary qualification documents.

When contacted by Reuters, Alibaba pointed to UC’s apology issued at the time of the broadcast.

360 will “resolutely obey” the orders of the regulator, it said in a statement on Weibo.

The fines were announced on the same day that SAMR warned nearly three dozen Chinese internet companies to cease engaging in anti-competitive business practices.

Over the weekend, SAMR imposed a record-breaking $2.75 billion fine on Alibaba for penalizing merchants who list items on other e-commerce sites, in a practice known as “two-choose-one.”

($1 = 6.5511 Chinese yuan renminbi)

(Reporting by Josh Horwitz, Roxanne Liu, Sophie Yu and Tony Munroe; Editing by Kim Coghill and Christian Schmollinger)

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