by CHENG Lu

China has rolled out new rules governing pricing behavior on internet platforms, marking a shift in how Beijing regulates online commerce. Rather than focusing mainly on penalties after violations occur, regulators are moving upstream to scrutinize how pricing algorithms operate in the first place.

The rules, jointly issued on December 20 by the National Development and Reform Commission, the State Administration for Market Regulation and the Cyberspace Administration of China, target how platforms set prices, distribute traffic and design promotions – areas long criticized by merchants and consumers as opaque.

An e-commerce merchant told Jiemian News that platforms now shape demand by deciding which products users see through recommendation systems. This often forces merchants to keep cutting prices, while consumers struggle to navigate complex discounts and question whether different users are being shown different prices.

CUI Lili, a professor at Shanghai University of Finance and Economics, said the rules fill a long-standing regulatory gap. Previous enforcement mainly addressed individual pricing cases, she noted, while the new framework extends oversight to the pricing logic embedded in algorithms, with multiple regulators coordinating supervision and enforcement.

A central requirement is greater transparency. Platforms will be required to disclose the basic principles behind differentiated pricing, dynamic pricing and bidding-based rankings, and to clearly state base prices and additional service fees. The aim is to help users understand why prices vary between consumers and why they can change in real time, offering a partial look into systems that usually operate out of public view.

The shift could force adjustments at major platforms whose business models rely heavily on data-driven pricing. During this year's Singles' Day shopping festival, platforms including Taobao and Pinduoduo used AI-driven coupons that changed prices in real time, fueling debate over the loss of "lowest price" guarantees.

Beyond algorithms, the rules also set limits on several long-standing practices, including charging different users different prices without clear disclosure, pressuring merchants to lower prices by exploiting market dominance, misleading promotions such as fake discounts, and default-selected services like automatic renewals or password-free payments that are difficult to cancel.

Cui said the provisions are more closely aligned with how platforms operate in practice and strengthen protections for smaller merchants, who often have limited bargaining power. The explicit ban on coercing sellers into price cuts, she added, is an uncommon move aimed at rebalancing platform–merchant relationships.

Enforcement, however, may prove challenging. Cui warned that platforms could comply with disclosure rules without revealing information that materially affects prices, depending on how strictly the rules are enforced.

The rules come as China faces slowing consumption and concerns over price wars across multiple sectors. Merchants told Jiemian News that expectations of ever-lower prices are already shaping consumer behavior, reinforcing downward pressure on prices.

The rules will take effect on April 10, 2026, giving platforms a transition period to review practices and adjust. Analysts say the key test will be whether enforcement leads to real changes in how pricing algorithms are used, rather than compliance limited to written disclosures.