United States and other platforms were interrogated: from the hotel "lowest price" to the lowest price volume, China's platform regulation is tightened

China's platform economic regulation was further tightened on September 19th. Reuters quoted Central TV as reporting that Beijing's market regulatory department initiated an investigation into Beijing's three fast technology and other companies, allegedly violating laws related to unfair competition; the investigation disclosed on the same day also involved the same route, roads and companies such as Alibaba's Hangzhou Taoyuan Air Services.

This round of law enforcement is not an isolated move. four days ago, the National Market Regulation General Administration and the Ministry of Culture and Tourism just convened the United States, Trembling, Kyoto, travel, travel, flying pigs and other online hotel reservation platforms for administrative guidance, publicly named "exclusive cooperation", "the lowest price on the whole web" and demanded that the platform be rectified in accordance with the Anti-Monopoly Law, the Anti-Unfair Competition Law, the Electronic Commerce Law and the Tourism Law.

The survey extends from one platform to the entire online tourism competition chain

According to public information, market regulators are currently investigating several online hotel and travel booking platforms. Reuters said the Chinese Hotel Association confirmed that the relevant departments have launched an investigation into four online hotels and travel booking platforms.

The facts of the violations in different cases are not exactly the same as the legal basis, so all platform investigations cannot simply be reduced to the same behavior. At this stage, it can be confirmed that regulators are further extending the rules of competition from the traditional "whether to form a monopoly" to the minimum price clauses, exclusive cooperation, platform subsidies and other practices that may affect the independent operation of merchants.

For hotel and catering, the “online lowest price” appears to be a platform promise to consumers that may actually require merchants not to give lower prices on other channels. Once large platforms have mastered the main traffic input, such provisions may affect the space for merchants to autonomously price and promote between different platforms. The regulatory authority’s September 15 administrative guidance would therefore clearly require the platform to prevent such competitive risks.

The so-called “anti-internal volumes” are becoming concrete enforcement laws

China's regulatory authorities repeatedly used the policy language of "correction of internal competition" this year. on September 17, the General Administration of market supervision also convened a special action promotion conference to combat inferior quality and low prices, saying that since the special action, the country has filed cases for 2,90,000 illegal cases in the fields of price, competition, quality, certification and recognition, a fine of 2,8 billion yuan, and demanded that the business entity turn from "low-price internal volume" to "quality competition, value competition".

For the platform economy, low-price competition itself is not illegal. Consumers also typically benefit directly from offers and subsidies. Regulatory disputes really focus on who bears the cost of subsidies, whether the platform uses its market position to force merchants to participate, whether it restricts merchants’ cross-platform choices through algorithms or contracts, and whether prices rebound after the competition ends.

This is also the problem that regulatory policies face: excessive restriction of price competition may reduce consumer preferences; allowing large platforms to use capital and traffic advantages to seize the market for long-term losses, and may transfer costs to small and medium-sized, riders or later enters.

Riders and retailers are also on the competitive cost chain of the platform.

The outsale, to store and hotel business surface belong to different markets, but all rely on the platform to control the traffic, ranking, commission, subsidies and trading rules. The platform to compete for consumers in subsidies, if the merchants are asked to synchronously reduce prices, whether the rider distribution pressure rises, whether the platform through the algorithm to pressure the performance cost to the workers, will determine who will ultimately pay for this competition.

On September 18, the General Administration of Market Regulation also pushed local regulatory authorities to sign cooperation agreements with U.S. League, Taobao flash shopping, shaking life services, fast hands and other platforms to support the development of individual industrial and commercial enterprises, stressing that platform enterprises and platform operators and workers "win-win development".

But administrative guidance, cooperation agreements and formal law enforcement must be distinguished. Administrative guidance expressing the direction of supervision, itself is not equal to the violation of the law; investigation is not equal to the final punishment. For companies under investigation, whether the violation, which business and contract terms are involved, and what liability may be borne, should still be determined by the subsequent investigation conclusions of the market supervision department.

Platform supervision enters the “rule enforcement” phase

Over the past few years, China’s platform regulation has undergone several stages including heavy anti-monopoly penalties, capital expansion restrictions, algorithmic governance and labor security. This concentrated survey of online travel and local living platforms shows that policy focus is further shifting to specific trading rules: minimum prices, exclusive cooperation, subsidies and how the platform uses data and traffic advantages.

From the perspective of the rule of law, what really matters is not how strong regulations are, but whether enforcement standards are stable, transparent and applicable to all market participants.Enterprises need to know which terms constitute unfair competition, need to know whether rejecting platform requests will be punished by traffic, and consumers also need to judge whether the so-called offer comes from efficiency improvements or are forced by other participants to bear costs.

As of the announcement, the US League and other companies under investigation said they would cooperate with the supervision.The results of the survey have not yet been published.With the "anti-internal volume" from the policy slogan further into the case enforcement, the key to the next phase of China's platform economy is not only whether the platform can continue to fight the price war, but whether the contractual power behind price competition, algorithm distribution and cost assumption can be more clearly incorporated into the legal rules.