"Internal Competition" Harms Businesses and Consumers, Beijing Interviews 12 Platform Enterprises

On March 23, the Beijing Market Supervision Administration, together with the Municipal Bureau of Commerce and the Bureau of Culture and Tourism, legally interviewed 12 platform companies including Ctrip, Qunar, Amap, Taobao Flash Sale, and others. They collectively reported the first batch of issues found since the comprehensive rectification of platform “involution” competition, delivered on-site “Administrative Caution Letters,” clarified rectification requirements, and delineated compliance red lines.

Strictly Regulate Violations and Protect Business Autonomy

One of the core issues of platform “involution” competition is that some platforms exploit their advantageous positions by forcibly intervening and operating without authorization, depriving merchants of their autonomous management rights, and shifting competitive costs onto small and medium-sized operators, leading to merchants “losing money to gain attention” or even facing survival pressures. Among the first batch of problems reported by the three departments, behaviors infringing on merchants’ autonomous management rights are particularly prominent and have become the focus of rectification.

“We signed an authorized operation agreement with Taobao Flash Sale, thinking it would be hassle-free and efficient, but it turned out to be the start of ‘passive losses,’” said Mr. Zhang, head of a Beijing-based restaurant chain. He revealed that after signing the agreement, the platform’s market manager could directly modify product information, register promotional activities, and adjust sales prices without merchant approval, with all legal responsibilities borne by the merchant.

A relevant official from the Beijing Market Supervision Bureau explicitly stated during the interview: “Platform agency operations cannot serve as a shield for ‘chaotic operations.’ Without clear consent from merchants, any modifications to product prices or forced participation in promotions are illegal and must be rectified immediately.”

In addition to unauthorized price changes and forced promotions, some platforms also deprive merchants of pricing rights. Several hotel operators reported that Ctrip uses technical means to monitor real-time prices across all channels and requires hotels to offer the lowest price online. “We tried to adjust prices on other platforms, but Ctrip automatically lowered our room prices that same day and restricted our store traffic,” said Mr. Wang, owner of a Beijing budget hotel.

Standardize Competition Rules and Protect Consumers’ Legal Rights

Platform “involution” not only infringes on merchants’ rights but also misleads consumers through unreasonable rules and false advertising, damaging consumers’ legitimate rights. The issues reported include setting unreasonable rules and false advertising, which are key focus areas for regulatory authorities.

Consumer Mr. Liu told reporters that he once purchased a “ticket snatching acceleration package” on a third-party train ticket sales platform, which claimed to “significantly improve success rates” and offer “priority booking.” However, after paying 30 yuan for the acceleration fee, he still used the official 12306 platform’s waiting list to get a ticket. During the interview, regulators reiterated that platforms are prohibited from packaging official free services as paid value-added services and from false advertising.

Some platforms also set unreasonable rules, imposing fines and traffic restrictions that increase operational burdens on merchants and indirectly affect consumer experience. Ctrip’s “cutting customer” judgment and penalty rules have caused dissatisfaction among many hotels. “A customer booked a room on Ctrip for one day, then extended their stay offline the next day, but Ctrip judged us as ‘cutting customer,’ requiring us to pay full commission and restricting our store traffic,” said Ms. Chen, a Beijing homestay operator.

“The ‘cutting customer’ judgment should be based on merchants actively guiding consumers to avoid the platform. Offline extensions and self-initiated cancellations through other channels do not constitute ‘cutting customer,’” said a relevant official from the Beijing Bureau of Culture and Tourism during the interview. They also stated that Ctrip has been guided to optimize the “cutting customer” rules, clarifying that behaviors like online booking followed by offline extension should not be judged as “cutting customer,” nor should merchants be penalized on this basis.

Deepen Comprehensive Rectification and Promote Healthy Development of the Platform Economy

The joint interview by the three departments is another important measure to promote the standardized and healthy development of the platform economy. Since the launch of the comprehensive rectification of platform “involution” competition in October 2025, Beijing has established a full-chain regulatory mechanism involving pre-emptive assessment and prevention, real-time monitoring and intervention, post-incident enforcement, and promotion of optimization and upgrading. This framework delineates compliance red lines and consolidates institutional safeguards for platform development.

To clarify the direction of rectification, Beijing’s regulatory authorities have formulated and dynamically updated the “Negative List of Platform ‘Involution’ Competition Behaviors,” specifying eight categories and 49 typical negative behaviors such as manipulation of rules and price control, so platforms clearly understand what they must not do. Additionally, they issued the “Guidelines for Compliance Management to Prevent ‘Involution’ Competition,” guiding platforms to establish a management model of “one organization, one list, one mechanism,” including setting up compliance management bodies, developing risk control lists, and improving quarterly self-inspection mechanisms to promote self-regulation and self-restraint.

To ensure the effectiveness of rectification, authorities adopt a “four-in-one” approach: platform self-inspection, undercover visits, flying inspections, and experience surveys, systematically identifying and addressing risks of “involution” competition. The first batch of issues reported was discovered through this process. Moving forward, authorities will continue to publicly disclose violations, monitor rectification progress, and impose penalties on platforms that fail to rectify or repeatedly violate regulations. For platforms outside Beijing, investigations will be transferred to local market supervision departments according to law. (Reporter Lai Zhikai)

Source: Workers’ Daily