A Brief Discussion on the Anti-Monopoly Compliance Guidelines for Internet Platforms

Meta’s penalty was mentioned previously. It reflects overseas efforts to rectify competition order in the internet sector, and also serves as a reminder that enforcement of relevant domestic legal provisions still has room for improvement. This discussion focuses on substantive progress in domestic regulation.

The State Administration for Market Regulation (SAMR) held an anti-monopoly compliance lecture themed “Anti-Monopoly Compliance for Internet Platforms”, delivering a special interpretation of the Anti-Monopoly Compliance Guidelines for Internet Platforms.

Some may question: since the Guidelines are not statutory provisions, what legal force do they carry? It should be noted that the Guidelines are positioned to provide grounds for factual determination under the Anti-Monopoly Law. Issuance of the Guidelines, followed by dedicated interpretations, essentially clarifies regulatory priorities and unifies law enforcement standards.

Against this backdrop, SAMR imposed a fine of RMB 5.179 billion on Ctrip for two violations: first, requiring some hotels to enter into exclusive cooperation, commonly known as the “pick one out” practice; second, forcibly deducting order reserves from hotel operators. Holding the lecture and interpreting the Guidelines at this juncture sends a clear signal: Ctrip is neither the first nor the last case.

The day after the lecture, SAMR released six typical cases of concentration review of business operators, including Tencent’s acquisition of equity in Ximalaya. One day was spent explaining “how to achieve compliance”, and the next day announcing “how reviews are conducted”. The regulatory message is unambiguous: rules and precedents are in place, and platforms must assess their own positions accordingly.

What exactly does the Guidelines define? Instead of quoting provisions clause by clause, eight key risk areas are summarised below.

1. Algorithmic collusion. Multiple platforms observe and imitate one another through pricing algorithms, leading to converged prices, without in-person meetings or signed agreements. The Guidelines specify that coordinated conduct to eliminate or restrict competition, achieved through real-time algorithmic monitoring and price adjustment, constitutes monopolistic behaviour. Hiding behind code offers no immunity from regulation.
2. Organising or assisting operators on the platform to reach monopoly agreements. Where a platform uses technical tools, platform rules or data algorithms to organise merchants on its platform to conclude agreements for price fixing, output restriction or market allocation, such conduct also amounts to monopolistic behaviour.
3. Unfairly high prices charged by platforms. A platform with market dominance that raises entry fees, service fees, technical service fees and other related charges far beyond reasonable margins commits unfair overpricing. In past years, commission rates on food delivery platforms rose from 18% to 23% and then to 26%. Merchants were not the primary beneficiaries of these high commissions. The Guidelines state that platforms may adjust fees within reasonable bounds, but must not arbitrarily raise prices by leveraging their dominant position.
4. Sales below cost, commonly referred to as “subsidy wars”. This is a prevalent tactic in the internet industry: subsidies are deployed to defeat competitors, and prices are raised to recoup costs once a monopolistic position is established. Food delivery, ride-hailing and community group-buying have all followed this pattern. The Guidelines bring this practice under regulation: subsidies are permissible in themselves, but must not aim to stifle competition.
5. Blocking and shielding. Platforms block links to one another, fragmenting user experience when switching between applications. The Guidelines cite this as a risk example: a platform with market dominance that blocks or shields goods and services of competing platforms through technical means or platform rules without legitimate reasons may constitute abuse of market dominance.
6. “Pick one out”. Forcing merchants to operate solely on its platform and forbidding them from joining rival platforms. Listed as a risk example in the Guidelines, this practice specifies that dominant platform operators requiring merchants to make exclusive choices between competing platforms may constitute abuse of market dominance.
7. Universal lowest price requirement. This provision has attracted considerable attention. A platform with market dominance may require merchants on its platform to ensure their product prices are no higher than those on competing platforms, and to match or further cut prices on its platform if merchants reduce prices elsewhere. This may constitute imposition of unreasonable trading conditions. A universal lowest price requirement may seem beneficial to consumers, since lower prices sound appealing. The core issue is that when a platform leverages market power to enforce such terms, it is not saving money for consumers, but diverting traffic at the expense of merchant profits. Merchants are squeezed, and consumers may not truly benefit. When all platforms mandate lowest prices, the outcome is not cheaper goods, but price convergence and the disappearance of competition. Once competition vanishes, high-quality goods and services cannot be sustained.
8. Differential treatment, known as “big data price discrimination”. For the same goods or services, long-term users see higher prices than new users, and loyal customers face higher charges than occasional visitors. This is not personalised recommendation, but differential treatment. The Guidelines clarify that a dominant platform operator applying differential treatment to merchants with identical transaction terms, in respect of transaction prices, payment terms, service standards and after-sales support, may constitute abuse of market dominance.

With these eight risk categories clarified, platform operators must identify their red lines. Consumers should not assume this matter is irrelevant to them. While the Guidelines ostensibly regulate platform conduct, their essence lies in protecting the legitimate rights and interests of merchants and consumers. At a deeper level, they guide the market toward sound and orderly development. Only a healthy market can sustain economic vitality; only a vibrant economy can secure individuals’ income, consumption and employment. Therefore, this is not merely an issue for platforms, but concerns everyone.