China Bans E-commerce Platforms From Forcing Lowest Prices or Abusing Algorithms

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.

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