China has unveiled new rules to rein in aggressive pricing tactics by online platforms, prohibiting e-commerce operators from forcing merchants to offer discounts or setting different prices based on user demographics without consent.
The 29-article regulation – jointly issued over the weekend by the National Development and Reform Commission, State Administration for Market Regulation (SAMR), and Cyberspace Administration of China – lays out detailed compliance requirements that target several long-standing pain points as competition among internet giants has often eroded the rights of both consumers and merchants.
To restore merchant autonomy on pricing, the rules ban platform operators from leveraging their dominant scale to impose “lowest price” agreements. Platforms are prohibited from using traffic throttling, search ranking demotions, or algorithm penalties to pressure merchants into predatory price-cutting or exclusive pricing arrangements.
The regulation also forbids platforms from setting different prices or charging standards for the same goods or services “without user consent” based on data – including users’ willingness or ability to pay, consumption preferences and consumption habits – algorithms, platform rules and “other means”.
In a bid to crack down on “price traps”, the rules mandate clear labelling of estimated prices versus settlement prices, while barring platforms from displaying lower prices on homepages or other prominent locations other than those shown on product detail pages.
