China has released draft rules to regulate pricing practices on internet platforms, following complaints from merchants and consumers about unfair or misleading prices.

The proposed regulations, announced on August 23, by the National Development and Reform Commission, aim to improve transparency and fairness in how platforms set prices for goods and services.

Under the draft, platform operators and merchants would be required to follow clear pricing guidelines, make pricing rules more transparent, and promptly disclose any changes in fees.

The commission said prices should be set and adjusted through standardized contracts or orders.

The move comes after past allegations against major platforms for manipulating prices and misleading customers.

The draft rules are open for public comment for one month.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ Regulatory response follows merchant pressure over platform pricing practices

China’s draft pricing rules represent a direct response to sustained complaints from merchants about unfair platform practices, particularly price manipulation tactics used by major e-commerce companies.

The proposed regulations specifically target practices like manipulating store traffic and altering prices based on consumer data profiling without disclosure—issues that have generated significant merchant frustration 2.

This regulatory intervention follows a pattern established in 2021 when Alibaba received a record $2.75 billion fine for anti-monopoly violations, demonstrating Beijing’s willingness to take enforcement action against platform giants 1.

The draft rules require platforms to “adhere to clear pricing regulations, increase the transparency of pricing rules and promptly disclose fee changes to better accept public oversight,” indicating regulators want to shift power dynamics between platforms and merchants 1.

The month-long public comment period signals that regulators are taking a measured approach, allowing stakeholders to influence the final regulations before implementation 1.

2️⃣ Domestic regulation coincides with global scrutiny of Chinese platforms

These pricing rules emerge as Chinese e-commerce platforms face significant international regulatory pressure, creating a dual challenge of domestic compliance and global expansion.

The EU received 4.6 billion packages in 2024 compared to 1.9 billion in 2023, with 91% of goods under €150 originating from China, prompting European regulators to investigate Chinese platforms for unfair practices 3.

Chinese platforms like Shein and Temu, which rely on the US market for 70% of their sales, are simultaneously navigating tariff increases and expanding into Europe where they face stricter product safety and consumer protection standards 4.

The timing suggests China may be addressing domestic platform practices while its companies face international scrutiny, though the regulations appear primarily focused on protecting domestic merchants and consumers rather than international concerns.

European regulators are already investigating Shein and Temu for potential breaches related to product safety and unfair practices, making domestic regulatory clarity potentially valuable for these expanding platforms 4.

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